Infinera to Acquire Transmode

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 $350M. 

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 $95M in cash and will issue some 13.0M 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 SEK61.5M ($7M) from SEK930M ($107M) in revenue, which was down sequentially from 2013 after a number of years of growth in what has been tough European marketplace.

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Categories: Mergers and Acquisitions · Telecom Equipment