Wow. This recent post is becoming such a hit that I'll have to update my top-ten most popular list (by the way, does it mean the shorter post the better hit ? ;-)
Here's the comment I left on NyquistCapital earlier today :
"I’m not convinced at all that it would make a lot of sense from a pure industrial perspective. Except a very few boxes in EXFO’ s product lineup, JDSU has it all. No need to add doublons to an already up & runing one-stop-shopping center. Maybe EXFO has some neat new technologies for emerging 40G or else, but JDSU has enough resources to do innovative R&D.
The only reason why JDSU should buy EXFO is to take over their North America installed base (plus a couple of key accounts here and there in EMEA).
Then, the acquisition makes sense. EXFO would be wipped out from the marketplace, full stop. Which would make the T&M landscape a bit more clear : three major players - Agilent, JDSU, Anritsu, plus an emerging one : Fluke/Tek.
The true Telecoms Test Powerhouse is this one : Danaher. Fluke + Tektronix. They cover the whole spectrum, with customer-friendly solutions.
My advice : if there is one single player to watch in the T&M field for the years to come, it’s Danaher."
Let's have a look at the actual financial situation of our two favorites gamble players of the day :
JDSU : $10.41, Market Cap: $ 2.28B (source : Yahoo!Finance)
EXFO : $4.35, Market Cap: $ 300.05M (source : Yahoo!Finance)
EXFO is small enough for JDSU to buy it without that much hurdles. Let's assume the objective of the deal is for JDSU to take over the north american positions (read : customer base - e.g. Verizon) of EXFO. $ 600M the NA marketplace is definitely not a big deal for JDSU's investors.