MRV LOOKING TO EXPAND WITH XYPLEX ACQUISITION.

Byline: Dave McNary Daily News Staff Writer

MRV Communications Inc., in a major expansion of its computer networking business, announced Tuesday it will buy Xyplex Inc. from struggling Whittaker Corp. of Simi Valley.

The deal will give MRV a Boston-based business with expertise in wide-area computer networking and remote-access service. Whittaker, which bought Xyplex in 1996 for $117.5 million, will receive $35 million in cash, along with warrants to buy up to 500,000 MRV shares for $35 a share.

Wall Street endorsed the transaction, due to close in the first quarter, with shares of Chatsworth-based MRV rising 2-1/8 to 25-5/8 and Whittaker gaining -7/8 to 10 15/16. MRV shares have been hurt recently by concerns over the Asian financial crisis, falling from an all-time high of 38-3/4 on Sept. 22.

MRV, which posted third-quarter profits of $5.9 million on sales of $42 million in its most recent quarterly report, will be adding about 300 employees to the 420 it now has on its payroll. Chief Executive Officer Noam Lotan said it is too early to tell if the deal will result in any job cuts.

Whittaker, which announced in April it was selling Xyplex and its defense electronics operations in order to focus on its core business of producing aircraft control products, took a $55.7 million charge last month to write down the value of the Xyplex assets and reported a loss of $163.6 million for its fiscal year.

Xyplex makes wide-area network routers and remote-access servers, while MRV specializes in local-area network devices such as high-speed networking and fiber-optic transmission systems.

Lotan said MRV will pay for Xyplex with part of the funds raised by September's public stock offering of 2.9 million shares at 35-3/4 a share, which boosted the total of common shares to 25.9 million.