EXFO Acquires PicoSolve

    Swedish company offers the industry's fastest optical sampling
    oscilloscopes for 40G and 100G R&D, manufacturing and deployment

    QUEBEC CITY, Feb. 9 /CNW Telbec/ - EXFO Electro-Optical Engineering Inc.
(NASDAQ:   EXFO; TSX: EXF) announced today the acquisition of PicoSolve, Inc., a
private test and measurement company offering the industry's fastest optical
sampling oscilloscopes for 40G and 100G R&D, manufacturing and deployment
    PicoSolve, founded in 2004 by researchers at Chalmers University of
Technology in Gothenburg, Sweden, provides ultra-high-speed optical sampling
oscilloscopes to network equipment manufacturers (NEMs) involved in the design
and production of next-generation optical networks. Network service providers
(NSPs) will also require such high-end test equipment for their deployment
    With bandwidth demand growing exponentially worldwide, NEMs are
increasing the transmission rates of their optical networks to 40 Gbit/s and,
in the near future, to 100 Gbit/s. Advanced modulation schemes, in which data
is encoded in both phase and amplitude of the optical carrier, allow NEMs to
reach ultra-high network speeds using existing DWDM channel spacing, while
maintaining resilience to chromatic and polarization dispersion phenomena.
Full characterization of this ultra-high-speed encoding represents a
significant test and measurement challenge for both NEMs and NSPs.
    PicoSolve currently has the only bit rate-independent test solution that
can measure such phase- and amplitude-modulated signals with a measurement
bandwidth of more than 500 GHz, yielding a sub-picosecond temporal resolution.
PicoSolve also brings to EXFO a rich intellectual property portfolio with
patents that will be leveraged over time.
    "PicoSolve represents a small but highly strategic acquisition because it
significantly strengthens our leadership position for characterizing
ultra-high-speed optical networks for the NEM and NSP markets," said Germain
Lamonde, EXFO's Chairman, President and CEO. "PicoSolve's optical sampling
oscilloscopes and the deep knowledge base that its team brings to EXFO will
prove to be invaluable assets as technologies migrate from R&D labs, onto
manufacturing floors, and into the field in upcoming years. Once again, EXFO
will be front and center to assist customers in their testing needs."
    "We are pleased to have found in EXFO a strong launching pad for our
optical sampling oscilloscopes," said Dr. Peter Andrekson, CEO of PicoSolve.
"Our technological leadership, combined with EXFO's brand equity, leading
market share in optical testing, as well as global sales presence and
relationships, should result in significant market-share gains in this
fast-growing market."
    According to Infonetics Research, the global market for 40G and 100G
optical network equipment should grow at a compound annual growth rate (CAGR)
of 46.2% from 2009 to 2011 to reach US$5.1 billion.

    About PicoSolve

    PicoSolve, founded in 2004, is a spin-off from Chalmers University of
Technology in Gothenburg, Sweden. Its staff has a very strong research track
record in all-optical sampling systems, and is now taking this a step further
to develop new, useful instruments for the fiber-optic communications industry
and R&D labs.

    About EXFO

    EXFO is a leading provider of test and service assurance solutions for
network service providers and equipment manufacturers in the global
telecommunications industry. The Telecom Division offers a wide range of
innovative solutions extending across the full technology lifecycle - from
design to technology deployment and onto service assurance - and covering all
layers on a network infrastructure to enable triple-play services and
next-generation, converged IP networking. The Life Sciences and Industrial
Division offers solutions in medical device and opto-electronics assembly,
fluorescence microscopy and other life science sectors. For more information,
visit www.EXFO.com.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995, and we intend
that such forward-looking statements be subject to the safe harbors created
thereby. Forward-looking statements are statements other than historical
information or statements of current condition. Words such as may, will,
expect, believe, anticipate, intend, could, estimate, continue, or the
negative or comparable terminology are intended to identify forward-looking
statements. In addition, any statements that refer to expectations,
projections or other characterizations of future events and circumstances are
considered forward-looking statements. They are not guarantees of future
performance and involve risks and uncertainties. Actual results may differ
materially from those in forward-looking statements due to various factors
including consolidation in the global telecommunications test, measurement and
monitoring industry; capital spending levels in the telecommunications, life
sciences and high-precision assembly sectors; concentration of sales;
fluctuating exchange rates and our ability to execute in these uncertain
conditions; the effects of the additional actions we have taken in response to
such economic uncertainty (including our ability to quickly adapt cost
structures with anticipated levels of business, ability to manage inventory
levels with market demand); market acceptance of our new products and other
upcoming products; limited visibility with regards to customer orders and the
timing of such orders; our ability to successfully integrate our acquired and
to-be-acquired businesses; our ability to successfully expand international
operations; the retention of key technical and management personnel; and
future economic, competitive, financial and market conditions, including any
slowdown or recession in the global economy. Assumptions relating to the
foregoing involve judgments and risks, all of which are difficult or
impossible to predict and many of which are beyond our control. Other risk
factors that may affect our future performance and operations are detailed in
our Annual Report, on Form 20-F, and our other filings with the U.S.
Securities and Exchange Commission and the Canadian securities commissions. We
believe that the expectations reflected in the forward-looking statements are
reasonable based on information currently available to us, but we cannot
assure you that the expectations will prove to have been correct. Accordingly,
you should not place undue reliance on these forward-looking statements.
    These statements speak only as of the date of this document. Unless
required by law or applicable regulations, we undertake no obligation to
revise or update any of them to reflect events or circumstances that occur
after the date of this document.

For further information:

For further information: Vance Oliver, Manager, Investor Relations,
(418) 683-0913, Ext. 3733, vance.oliver@exfo.com

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