ADTRAN, Inc, a provider of networking equipment, announced on Monday that it plans to acquire the fixed line Broadband Access Business (BBA) of Nokia Siemens Networks, as well as the associated professional services and network management. The planned acquisition would include the broadband access intellectual properties, technologies and the established customer base.
This is the second major divestiture of NSN (Espoo, Finland), who last month announced plans to cut 17,000 jobs - nearly 25% of its workforce - in order to save about $1.35 billion a year. In late November, the company announced the sale of its WiMAX business to private-equity backed NewNet Communication Technologies (Shelton, Conn., U.S.A.). NSN announced that 300 employees would be transferred to NewNet under the conditions of the acquisition.
In the acquisition of its broadband business, NSN said up to approximately 400 employees, including engineering, R&D, sales and professional services employees, are expected to transfer to ADTRAN (Huntsville, Ala., U.S.A.) globally. The agreement also includes provisions which would allow ADTRAN solutions to be incorporated by Nokia Siemens Networks into its customer propositions.
Currently, 90% of ADTRAN’s revenue comes from the U.S. The acquisition of NSN’s broadband business extends the companies reach into 26 countries, including Europe, the Middle East, Africa, India, Russia and Asia.
“[The acquisition] will significantly accelerate our strategy because now we not only have incumbency with major service providers across these 26 countries, but we also have a team and a product portfolio that is tailored for the market requirements of these countries,” says Gary Bolton, vice president of global marketing at ADTRAN.
In the first three-quarters of this year, ADTRAN increased 140% year-over-year for international growth, but according to Bolton this acquisition will “obviously significantly accelerate it.”
The planned transaction is expected to close by the end of April 2012. After close of the planned transaction ADTRAN expects in the range of $140-$180 million of incremental revenue for the first twelve months after closing. The company also projects that the acquired business will be neutral to diluted earnings per share for the first full year and accretive thereafter.