Telecom equipment maker JDS Uniphase has agreed to acquire American Bank Note Holographics, whose holograms are used by MasterCard and Visa, for $138 million in cash and stock, the companies announced Tuesday.
In Tuesday afternoon trading, shares of JDS Uniphase edged up $0.07, or 0.5 percent, to $14.01. Shares of American Bank Note Holographics, valued at $6.15 per share under the acquisition deal, climbed $0.30, or 5.4 percent, to $5.90 in over-the-counter bulletin board trading.
The largest shareholder of American Bank Note Holographics as of September 30 was Libra Advisors, a hedge fund based in New York City. Libra had 2.2 million shares, or 11.1 percent of the shares outstanding, worth $10.8 million.
Optical communications and test equipment account for the the biggest chunk of JDS Uniphase's revenue. For the quarter ended September 30, the company posted total revenue of $356.7 million, of which $121.3 million was from communications gear and $168 million was from test and measurement equipment. The company's Advanced Optical Technologies unit, which will absorb ABNH, posted revenue of $48 million.
Under terms of the deal, JDS Uniphase, based in Milipitas, California, will pay $5.15 worth of the company's common stock and $1 in cash for each share of American Bank Note Holographics, based in Robbinsville, New Jersey. The transaction is expected to be tax-free to shareholders and close in the quarter ending March 31.
JDS Uniphase's security devices for documents and products such as pharmaceuticals include a multi-layer pigment technology used on the currencies of at least 100 countries and embedded "microflakes" used for product authentication.
In a statement, JDS Uniphase cited data from the International Chamber of Commerce estimating that the cost to brand owners of battling counterfeiters will double from $600 billion in 2006 to $1.2 trillion by 2009.
In November, a jury found JDS Uniphase and four former executives innocent of securities fraud and insider trading related to shareholder losses in the dot-com stock bubble that burst in 2001. The lawsuit sought more than $20 billion in damages.
In 2000, the company's share price peaked at more than $1,000 before a long downward slide.