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SANTA CLARA, CA-New Focus Inc. is expanding its production facilities in the People’s Republic of China more rapidly than expected thanks to new customers and increasing demand from existing ones. Following the addition of 75,000-sf at its manufacturing facility in Shenzhen, PRC, the supplier of fiber optic products for next generation optical networks says it will now add another 75,000-sf next year to keep up with demand.

CEO Ken Westrick says two new customers in the second half of 2000 and growing demand from its existing customers triggered the recent decision “to increase our manufacturing capacity beyond our previously announced plans.” At the beginning of this year, the entirety of New Focus’ manufacturing was conducted domestically in a 15,000-sf facility in Santa Clara. Since, in addition to the China operations, another facility was opened in San Jose, with a second scheduled to open there in the coming quarter.

New Focus had previously announced it would have 159,000 total sf of manufacturing space during the first quarter of 2001. Now, with the decision to fit-up the Shenzhen, its production facilities will total 234,000 sf by mid-2001, says Westrick.

Another addition to New Focus’ manufacturing space will come when the company finalizes its announced merger with JCA Technology Inc., a privately held company that designs, manufactures and markets a full line of fiber optic products. The merger is expected to close next month, though with different terms than originally hammered out in October due to recent stock market fluctuations.

The first revision modifies the transaction consideration to a fixed 10,033,556 shares of New Focus common stock and $75 million in cash. Based on the $26.375 closing price of New Focus shares today, the total implied value of the transaction is approximately $340 million. The original transaction consideration was composed of $575 million of New Focus common stock and $25 million in cash with the number of New Focus common shares determined by the average price of the company’s common stock for a 10-day period prior to the closing of the transaction.

David A. Shoquist, treasurer of New Focus tells GlobeSt the company has no plans to reduce the size of CJA’s Technology space following the merger. If anything, CJA had been looking to expand its manufacturing facilities. New Focus is planning to move its headquarters and prototype development into its new space at Hellier and 280th once it is complete. The company will occupy approximately half of the 260,000 sf in the building that has been under construction for the past five or six months, says Shoquist.

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