EXFO Announces Acquisition of Global Wireless Test Specialist NetHawk Oyj

By Exfo Inc., PRNE
Thursday, March 11, 2010

NetHawk has Built a Strong Portfolio of 2G, 3G and 4G/LTE Wireless Protocol Analyzers and Simulators Over Almost 20 Years to Assume No. 2 Position in Both Product Lines

QUEBEC CITY, March 12, 2010 - EXFO Inc. (NASDAQ: EXFO, TSX: EXF) announced today the acquisition of
NetHawk Oyj ("NetHawk"), the second-largest provider of 2G, 3G and 4G/LTE
protocol analyzers and simulators for wireless network equipment
manufacturers (NEMs) and network operators, in an all-cash transaction
estimated at (euro)37.3 million for all outstanding shares on a fully diluted
basis, or (euro)27.6 million excluding NetHawk's net cash.

EXFO entered into a purchase agreement to acquire 91% of NetHawk's
outstanding shares and will purchase the remaining shares pursuant to a
statutory procedure under the Finnish Companies Act. An additional earn-out,
based on sales over the next three years, could raise the total value of the
transaction by (euro)8.7 million.

NetHawk, headquartered in Oulu, Finland, brings to EXFO almost 20 years
of wireless expertise and customer relationships. Key products consist of
protocol analyzers for protocol development, network deployment, optimization
and performance measurement as well as network simulators for load
generation, regression and functional testing. Solutions cover a wide range
of wireless technologies, namely 2G, 3G and 4G/LTE. It is estimated that
NetHawk holds the No. 2 position for both protocol analysis and network
simulation in terms of global market share, including a market-leading
position in testing high-growth 4G/LTE networks.

NetHawk has also developed a 2G, 3G and 4G/LTE service assurance
solution, based on iPro's 1G and 10G wireline stream capture and M5's deep
protocol and KPI analysis, to focus on testing the core and radio access
networks of a wireless telecommunications infrastructure. This offering is
highly complementary to EXFO's BrixCall, BrixNGN and BrixVision suite of
highly scalable service assurance solutions for active and passive monitoring
of the application layer on next-generation IP networks.

Frost and Sullivan, a global growth consulting company, forecasts the
Protocol Analyzer and Network Monitoring Market for wireless networks will
grow from US$595.2 million in 2008 to US$814.2 million in 2013. The LTE Test
Equipment Market is expected to increase at a compound annual growth rate of
56.0% during this period. NetHawk's total addressable market is currently
estimated at US$610 million.

"This acquisition represents a defining milestone in EXFO's near 25-year
history, since it not only transforms us into a global force in wireless
testing, but it also moves us among the top five suppliers in the telecom
test and service assurance industry with more than 1,600 employees in 25
countries supporting in excess of 2,000 customers," said Germain Lamonde,
EXFO's Chairman, President and CEO. "NetHawk's excellent positioning for the
high-growth 3G and 4G/LTE test markets and strong customer relationships
forged over almost 20 years underlie the rationale behind this deal. Joining
forces makes the new EXFO far more relevant to global network operators and
NEMs, as we can now offer one of the most advanced and complete product
portfolios for both fixed and mobile networks. In a nutshell, I'm confident
the whole is far greater than the sum of the parts and we intend to press
forward on our long-term strategy to deliver growth in revenues and earnings.
I'm pleased to welcome the entire NetHawk staff to the EXFO family."

"We're genuinely pleased to become a part of EXFO, a world-class
organization which like NetHawk has a proven history of innovation and
all-around execution," said NetHawk CEO Hannu Huttunen. "EXFO's global brand
reputation and market presence, combined with our deep wireless knowledge and
customer relationships, are sure to jointly carry us to new heights as the
industry undergoes accelerated 3G deployment and LTE adoption to cope with
explosive bandwidth demand largely created by smart phones."

NetHawk posted revenue of (euro)28.5 million and EBITDA of (euro)4.2
million for the fiscal year ended December 31, 2009. (EBITDA is defined as
net earnings before interest, taxes, depreciation and amortization). EXFO
plans to retain NetHawk's management, R&D, sales and marketing teams of
approximately 370 employees mainly located in Finland, India and the United
. Revenue from NetHawk will be recognized as part of EXFO's protocol
business, under its Telecom Division.

The acquisition is expected to be neutral for the remainder of fiscal
2010 and accretive in fiscal 2011, excluding after-tax amortization of
intangible assets and stock-based compensation costs.

Conference Call

EXFO will host a conference call today at 8:30 a.m. (Eastern time) to
discuss the details of the NetHawk acquisition. To listen to the conference
call and participate in the question period via telephone, North American and
International callers can dial 1-416-981-9037. An audio replay of the
conference call will be available one hour after the end of the event until
10:30 a.m. (Eastern time) on March 19, 2010. The replay number is
1-402-977-9141 and the reservation number is 21463032. The live audio Webcast
and replay of the conference call will also be available at

Acquisition Microsite

EXFO has created a special microsite related to the NetHawk acquisition.
It contains a video from Mr. Lamonde to various stakeholders, as well as
other pages outlining the rationale, benefits and financials of the deal. Go
to www.EXFO.com/NetHawk to gain access to all the details.

About NetHawk

Founded in 1991, NetHawk is one of the leading worldwide providers of
analyzers, simulators and monitoring systems. NetHawk products and systems
are used in the development and operation of telecommunications networks by
leading communications equipment manufacturers and operators worldwide.
NetHawk employs about 370 specialists who focus on the development,
production, sales and marketing of testing tools for converging networks.
Headquartered in Oulu, Finland, NetHawk has local offices in Sweden, Germany,
France, India, Singapore, China, and the United States. In addition, a wide
network of distributors ensures local service all over the world.

About EXFO

EXFO is a leading provider of next-generation test and service assurance
solutions for wireless and wireline network operators and equipment
manufacturers in the global telecommunications industry. The Telecom
Division, which accounts for more than 90% of the company's revenues, offers
core-to-edge solutions that assess the performance and reliability of
converged, IP fixed and mobile networks. Key technologies supported include
3G, 4G/LTE, IMS, Ethernet, OTN, xDSL, and various optical technologies
accounting for an estimated 33% of the portable fiber-optic test market. The
Life Sciences and Industrial Division provides solutions in medical device
and opto-electronics assembly, fluorescence microscopy and other life science
sectors. EXFO has a staff of approximately 1,600 people in 25 countries,
supporting more than 2,000 customers worldwide. For more information, visit

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 the effect of the worldwide recession and the length of the
recovery on the telecom market for our customers and suppliers; fluctuating
exchange rates and our ability to execute in these uncertain conditions;
consolidation in the global telecommunications test, measurement and service
assurance industry; capital spending levels in the telecommunications, life
sciences and high-precision assembly sectors; concentration of sales; 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 condition. 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: Vance Oliver, Manager of Investor Relations,
EXFO, +1-418-683-0913, Ext. 3733, vance.oliver@exfo.com; Maryse Brodeur,
Media Planner, EXFO, +1-418-683-0913, Ext. 3429, maryse.brodeur@exfo.com

For further information: Vance Oliver, Manager of Investor Relations, EXFO, +1-418-683-0913, Ext. 3733, vance.oliver at exfo.com; Maryse Brodeur, Media Planner, EXFO, +1-418-683-0913, Ext. 3429, maryse.brodeur at exfo.com

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