Until now, Infinera's road has been an organic one. But that is coming to a close with plans announced today to acquire the Swedish packet-optical vendor Transmode for about $350 million.
The proposed purchase is still an offer rather than a done deal, but it's one that's going to shareholders having been endorsed unanimously by Transmode's board and by Pod Investment AB which holds 33% of the total shares and voting rights. So it's going to happen.
Infinera will be paying $95 million in cash and will issue some 13 million new shares, with current Transmode shareholders owning some 8.7% of the combined company.
Transmode's metro packet-optical technology will be married with Infinera's DWDM portfolio to create an end-to-end WDM offering. It's a logical pairing of both technology and customer bases that will give Infinera a talent base over in Sweden to integrate with its teams back in California. But first they'll have to jump through the hoops necessary to acquire a public company in Europe.
Consolidation among vendors has been relatively quiet lately. Might Infinera's move re-ignite the embers?
In 2014, Transmode earned about 61.5 million kronor ($7 million) from 930 million kronor ($107 million) in revenue, which was down sequentially from 2013 after a number of years of growth in what has been a tough European marketplace.
This article was authored by Rob Powell and was originally posted on Telecomramblings.com
Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.