EXFO acquires Avantas Networks
Aug. 23, 2001--EXFO Electro-Optical Engineering Inc. announced it has entered into an agreement to acquire Avantas Networks Corporation for approximately $65 million.
EXFO Electro-Optical Engineering Inc. (NASDAQ: EXFO, TSE: EXF) announced it has entered into an agreement to acquire Avantas Networks Corporation for approximately $65 million, or $93 million for the equity minus $28 million of Avantas cash on hand. Consideration paid consists of approximately 4.4 million EXFO shares and $36 million in cash.
Avantas, a Montreal-based, pre-revenue company that recently released datacom and telecom testers capable of measuring up to 10 Gb/s systems, is a supplier of fiber-optic testing and optical network performance management equipment that supports a wide range of protocols and data transmission rates.
Based on the latest ASIC and FPGA technologies, its portable Service Test Gear (STG) Series products represent the only solution that supports multi-protocols like ATM, SONET, SDH, Gigabit Ethernet and Ethernet, as well as data transmission rates from OC-192 (10 Gb/s) down to DS0 (64 kb/s) in North America and STM-64 (10 Gb/s) down to E0 (64 kb/s) in Europe and abroad, on a single platform. These feature-rich-instruments, with one of the smallest footprints in the industry, test critical network performance parameters.
Avantas' remote optical network performance management system, Network Guardian G2, provides real-time surveillance 24 hours per day, seven days per week. A single administrator can simultaneously observe critical Quality of Service (QoS) parameters at key locations in the network by relying on data from remote Network Guardians. This system is fully complementary to EXFO's remote fiber test system.
Similar to EXFO's product portfolio, these product lines are designed for telecommunications carriers, system manufacturers and research labs.
This transaction enables EXFO to enter the fiber-optic protocol layer testing sector and increase its addressable market size. The global fiber-optic protocol layer test equipment market is expected to increase from $1.6 billion in 2001 to $3.1 billion in 2005, according to a May 2001 global market study on ATM, SONET and SDH test equipment from Frost and Sullivan, a high-tech market research firm.
EXFO plans to take advantage of Avantas' research and development team to quickly gain market share in the protocol layer testing market.
The Avantas acquisition has been approved by the board of directors of both companies, but it is subject to regulatory approval and other customary closing conditions. The deal is expected to close by the end of the first quarter of fiscal 2002. The transaction will be accounted for under purchase accounting.
EXFO is a designer and manufacturer of fiber-optic test, measurement and automation solutions for the telecommunications industry. For more information, visit www.exfo.com.