By Tejas Venkatesh
JDS Uniphase (JDSU) has acquired U.K.-based Arieso, a provider of location-based telecom network intelligence software. The transaction is meant to help carriers alleviate bandwidth constraints caused by limited spectrum capacity.
Arieso provides location intelligence software that produces maps showing network traffic down to building-level resolution. This information, based on actual measurements from consumer devices, allows mobile operators to deploy small cells strategically or even offload traffic to Wi-Fi networks.
JDSU is paying $85 million in cash for Arieso, which put up $27 million in bookings last year. Assuming actual revenue is slightly below bookings, the deal probably values Arieso in the upper end of 3-5x revenue. That valuation is about one-quarter of what we estimate Intucell received in its sale to Cisco (NASDAQ:CSCO), but that valuation was certainly an outlier.
Perhaps a closer comparable would be Optimi's sale to Ericsson (NASDAQ:ERIC) in 2010 for $99 million. We've previously heard the Optimi deal was valued at roughly 2-3x sales. Arieso raised $14.5 million in funding from Add Partners Ltd and Qualcomm (NASDAQ:QCOM), among others. The company has marquee customers including AT&T (NYSE:T), Telefónica (NYSE:TEF), and Vodafone (NASDAQ:VOD). Arma Partners advised Arieso on its sale.