In our industry, M&A announcements seem to be the most interesting news of the day. Finisar is certainly no stranger in this arena. We have had 17 acquisitions over the past decade. In some ways, it was the technology acquired through these transactions that has helped us to become the world’s largest supplier of optical communications components.
You may have heard that last week Finisar announced the sale of our Network Tools (NT) business to JDSU. For those of you how know us primarily for our optics products, I’d like to give a brief history of our Network Tools business.
It was started in the early 90’s as an internal development effort to avoid buying expensive test equipment for building 1 Gbps optic modules for Fibre Channel. Later, it went on to become a leader in products like the Xgig, the storage industry’s number one protocol analyzer and data generator platform. During our last fiscal year, Network Tools achieved $44.2M in revenue, but while profitable, contributed less than 10% of our total revenues. This division had a different business model than our optics business with higher gross margins and higher operating expenses but slower growth. As every industry sector generally trends toward consolidation, it was logical for this division to be part of a larger operation.
While this business contributed less than 10% of our total revenues, we are very proud of the accomplishments of the NT team. We wish them much success in their new home.
The ultimate benefit to Finisar is that we remain focused on our core business of delivering the best optical communications products in the industry where our transceiver/transponder business is number one in market share.
Please feel free to share your thoughts on this topic in the comments below.