MRV to divest network integration business, focus on optical communications

A review of strategic alternatives that lasted nearly a year has led MRV Communications, Inc. (PINKSHEETS: MRVC) to divest its network integration businesses and focus its efforts on its Optical Communications Systems (OCS) business. To this end, the company has lined up buyers for two of its network integration subsidiaries and will attempt to find someone interested a third.

A review of strategic alternatives that lasted nearly a year has led MRV Communications, Inc. (PINKSHEETS: MRVC) to divest its network integration businesses and focus its efforts on its Optical Communications Systems (OCS) business. To this end, the company has lined up buyers for two of its network integration subsidiaries and will attempt to find someone interested a third.

MRV announced the strategic review last September (see “MRV seeking alternatives for network equipment business, including optical networking”). The company subsequently decided that its position in the optical communications business, including products for optical transport and Carrier Ethernet applications, was worth defending.

"During our strategic review process, it became very apparent that there is real value in the OCS technology platform and that we are well positioned in the optical transport and Carrier Ethernet markets and specifically in the rapidly growing mobile backhaul data center and cloud computing verticals,” explained MRV CEO Barry Gorsun via a press release. “We believe that we could best serve our stockholders and customers by leveraging these strengths to deliver innovative new products to the high-growth segments of our markets. This decision was reinforced by a top-tier service provider who recently selected MRV's OptiSwitch and ProVision solutions for an international metro-Ethernet deployment. In fact, we have already started shipping against this contract."

In addition to the OptiSwitch line of Carrier Ethernet products, MRV’s optical communications offerings include the FiberDriver and LambdaDriver optical transport platforms.

"Rising demand for bandwidth-intensive applications, mobility, and cloud computing are the catalysts forcing carriers to upgrade their infrastructure to next-generation networks,” Gorsun continued. “Recent market data estimates that the subsets of these markets that MRV addresses are poised for solid long-term growth, despite the current challenging macroeconomic spending environment. Service providers around the globe have come to expect best-in-class products and services from MRV and we intend to build upon this tradition to drive growth and increase our market share over the long term."

However, the same cannot be said for the network integration space, apparently. As a result, MRV filed a preliminary proxy statement on Schedule 14A with the Securities and Exchange Commission (SEC) August 9 that described its plans to sell off its European-based network integration companies. MRV revealed it has reached a sale purchase agreement for its French subsidiary, Interdata, and it has entered into a letter of intent in advance of a potential sale of its Swedish subsidiary, Alcadon-MRV AB. The company also has retained the investment bank Headwaters BD, LLC, to evaluate and explore strategic alternatives for its Italian subsidiary, Tecnonet S.p.A.

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