IPG Photonics Corp. (NASDAQ: IPGP) and Padtec SA independently announced that the former has agreed to buy the latter’s submarine networks division (SND). Padtec says it will receive R$75,000,000 (almost $20 million) for the business unit in a deal expected to close during the current quarter. The boards of both companies have approved the agreement.
The SND is responsible for the Brazilian optical technology company’s LightPad Submarine offering, designed to provide turnkey submarine network technology (particularly Padtec’s optical repeater) and services, including project planning, management, and execution. "The acquisition of Padtec SND enables IPG to leverage core pump laser and fiber amplifier technology to advance the market for submarine networking systems," said Ekaterina Golovchenko, IPG Photonics' vice president of telecommunication systems.
"The selection of Padtec SND by a large Internet service provider to manage and execute the deployment of a high-capacity submarine cable network in Brazil underscores their advanced submarine networking technologies,” Golovchenko continued. “Combining Padtec SND's submarine network capabilities with IPG's high-power optical amplifier, Raman pumping, and WDM systems technologies provides us with a leading-edge platform to capitalize on the growing number of undersea cable network deployments around the world."
IPG says the addition of the SND and its approximately 30 employees is not expected to be material to the company’s financial results for the fiscal year ending December 31, 2019.
Padtec says the sale of SND will enable it to focus on its terrestrial optical transport activities. “In recent years, we have seen Padtec’s customer base grow exponentially in Brazil and Latin America and this has boosted the company’s business. Moving forward, the focus of the company will be to direct these additional resources to continue to offer advanced and robust products and services, making Padtec increasingly competitive,” according to Argemiro Sousa, Padtec’s executive vice president of sales.
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