JDSU to Acquire American Bank Note Holographics, Inc.

JDSU and American Bank Note Holographics, Inc. today announced a definitive agreement for JDSU to acquire ABNH, a market leader in the origination, production and marketing of holograms for security applications and the leading supplier of optical security devices for the transaction card market.

This acquisition will build upon JDSU's leadership position in security solutions for brand protection and expand its position into security solutions for transaction card-based commerce. It also will fortify JDSU's leadership position as a fully integrated overt and covert security solutions provider for product authentication and brand protection. Following the close of the transaction, ABNH will become part of JDSU's Advanced Optical Technologies business segment.

Under the terms of the agreement, JDSU will acquire ABNH for approximately $138 million in cash and JDSU stock, or $6.15 per ABNH share. ABNH holders will receive $5.15 of JDSU common stock and $1.00 of cash for each share of ABNH common stock. The value of the JDSU shares to be paid to the ABNH stockholders will be determined with reference to the average of the closing sales price for a share of JDSU common stock on the Nasdaq Global Market for the five consecutive trading days ending with, but including, the trading day that is three trading days prior to the date of the closing of the transaction. The stock consideration is expected to be tax-free to the ABNH stockholders. The transaction is expected to close in the quarter ending March 31, 2008, subject to receipt of regulatory and ABNH shareholder approvals. JDSU expects the transaction to be accretive on a non-GAAP basis.

Through this acquisition JDSU will be gaining a strong foothold in brand security for the transaction card market as a result of ABNH's relationships with the major transaction card networks. ABNH currently supplies and supports card manufacturers with security and decorative products that are featured on cards issued by over 20,000 financial institutions worldwide.

ABNH's state-of-the art, holographic origination technologies will be added to JDSU's patent-protected portfolio of optical security solutions. JDSU will continue to partner with customers from concept to delivery, bringing deep optical science expertise for layered security solutions to aid in their combat against brand erosion and lost revenue due to counterfeiters.

"As the battle against counterfeiters becomes increasingly relevant on a global scale, brand owners are heavily investing in overt and covert security solutions," said Roy Bie, senior vice president and general manager of JDSU's Advanced Optical Technologies business segment. "With the addition of ABNH's technology expertise and leadership in providing security to the transaction card market, we will be uniquely positioned to supply comprehensive security solutions to our customers in the fast-growing brand security market."

According to recent data from the International Chamber of Commerce, the brand protection market is at a tipping point. The costs to brand owners battling counterfeiting were estimated to be $600 billion in 2006 and will grow to $1.2 trillion by 2009.

"We are thrilled to be joining forces with JDSU at this critical point in the evolution of the brand protection market. With the proliferation of advanced imaging technologies available to counterfeiters today and the recent dramatic escalation in counterfeit activity, the need for a comprehensive solutions-based approach has never been greater. The combination of ABNH and JDSU technologies, products and market positions will provide a formidable answer to this escalating global requirement," said Kenneth Traub, president and chief executive officer of ABNH.

ABNH is based in Robbinsville, New Jersey and has approximately 110 employees. For the first nine months of calendar 2007, revenues were $23.7 million.

In connection with the transaction, Morgan Keegan & Co., Inc. is acting as financial advisor and Fulbright & Jaworski L.L.P. is legal counsel to ABNH.

JDSU (Nasdaq: JDSU; and TSX: JDU) enables broadband and optical innovation in the communications, commercial and consumer markets. JDSU is the leading provider of communications test and measurement solutions and optical products for telecommunications service providers, cable operators, and network equipment manufacturers. JDSU is also a leading provider of innovative optical solutions for medical/environmental instrumentation, semiconductor processing, display, brand authentication, aerospace and defense, and decorative applications.

American Bank Note Holographics, Inc. ("ABNH") (OTC Bulletin Board: ABHH), is a world leader in the origination, production, and marketing of holograms. ABNH's products are used primarily for security applications such as counterfeiting protection of transaction cards, identity documents, documents of value, pharmaceuticals and other consumer and industrial products. ABNH's headquarters is in Robbinsville, New Jersey.