(JDSU) JDS Uniphase Gets Rid of Hologram Business

JDS Uniphase Corp. (JDSU), the leading provider of communications test and measurement solutions, declared that it has completed the sale of its holographic security business to OpSec Security Inc. The deal, which was announced on September 19 this year, marks an exit of JDSU from the holographic security business as the company intends to concentrate on its core businesses.

The holographic security product line primarily addresses the transaction card market segment and generated revenues of approximately $5.0 million per quarter for JDSU. As part of the deal, 75 employees of JDSU, who are associated with the Hologram business will be transferred to OpSec Security Inc. However, the financial terms of the deal were not disclosed by either of the companies.

Apart from serving the communication industry, JDSU is emphasizing on serving the anti-counterfeiting market primarily through advanced security pigments, thread substrates and printed features for the currency, pharmaceutical and consumer electronic segments. Management believes exiting the holographic business will allow it to focus on innovating and developing new products for the anti-counterfeiting market.

The company is increasing its presence in the Communication Test and Measurement segment as it faces stiff competition in the Optical Networking component sector from the likes of Finisar Corp. (FNSR), Oplink Communications Inc. (OPLK) and Oclaro Inc. (OCLR). The divesture of the holographic business will allow the company to focus more on its Wireless backhaul services and Long Term Evolution (LTE) test solutions to the telecom carriers.

We maintain our long-term Neutral recommendation on JDS Uniphase Corp. The company also retains a Zacks #3 Rank, implying a short-term Hold rating.

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