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Corning buys Tropel for $190 million

The optical technology giant will pay $60 million in cash and issue 1.95 million shares of common stock to acquire the components maker.

    Optical technology giant Corning announced Tuesday that it agreed to buy Tropel for $190 million in cash and stock.

    Corning, a maker of equipment and parts for optical networks, will pay $60 million in cash and issue 1.95 million shares of common stock to acquire the maker of components used in semiconductor test equipment.

    The deal will mostly leave Corning's balance sheet intact. Corning said in a statement that the purchase of the Fairport, N.Y.-based company will be neutral to its pro forma earnings in 2001 and boost its profits in 2002.

    Pro forma earnings exclude amortization of intangibles and goodwill, research and development, one-time acquisition costs, closed operations and other nonrecurring items.

    Industry analysts said that the deal is a way for the Corning, N.Y.-based company to shore up its technology expertise in non-core business segments.

    The acquisition "adds to (Corning's) keeping up with technology on the semiconductor front, but it doesn't change their perception as a communications company," said Charles Willhoit, an analyst at J.P. Morgan Chase.

    Corning expects the deal to close in the first quarter of 2001.

    An acquisition of $190 million is relatively miniscule for a company like Corning, which generated sales of $4.3 billion in 1999. "It's a rounding error," said Kevin Slocum, an analyst at Wit SoundView.