Fiber connectivity technology specialist Clearfield, Inc. (NASDAQ: CLFD) revealed today that it has agreed to buy Finnish fiber-optic cable manufacturer Nestor Cables Oy. Clearfield will pay $23 million, including fees, for Nestor in a deal Clearfield expects will close in a few months, subject to Finnish regulatory approval. Clearfield will use existing credit facilities to fund the deal.
Founded in 2007 and headquartered in Oulu, Finland, Nestor has supplied cabling technology to Clearfield for the past 12 years in support of Clearfield’s FieldSmart lines. Cheri Beranek, president and CEO of Clearfield, told attendees on an analyst call this morning that Nestor will continue to serve its current customers, who are primarily in Northern Europe, as a subsidiary of Clearfield while offering greater surety of supply to Clearfield. The Finnish company currently offers fiber-optic cables, connectivity accessories, instrumentation, and the Nestor Optimus microduct product family.
To further ensure supply as well as lower shipping time and costs, Beranek added that Clearfield will begin producing the sort of cabling products Nestor has supplied in Clearfield’s production facility in Mexico starting next year. Beranek added that Clearfield may use Nestor’s customer relationships as a springboard for sales of its connectivity products in Europe in the future.
Nestor operates two production facilities (including one in Oulu) and serves customers in more than 50 countries. In 2021, Nestor generated €31.7 million in revenue under Finnish Accounting Standards. Beranek said she expects the acquisition to be accretive to Clearfield’s earnings and said Nestor’s sales were on a 20% to 25% annual growth track this year.
“The acquisition of Nestor is a significant milestone for Clearfield,” Beranek said in a prepared statement. “Nestor has been a wonderful company to work with over the last 10 years, and we are thrilled to be adding them to our team. Nestor’s focus on providing its customers with reliable and flexible deliveries, quick reaction times, and operational efficiency is entirely aligned with Clearfield’s company culture. Moreover, Nestor employees have deep expertise in fiber-optical development and manufacturing, with many employees who gained their skills with the production of optical cable by Nokia years ago. We are excited for the potential opportunities afforded by this acquisition, namely the ability to leverage their fiber-optic cable expertise in our own manufacturing facility in Mexico and, in the longer term, evaluate the opportunity to enter the European market with our fiber management solutions.”
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