Stephen Simpson, CFA
Stephen Simpson, CFA
May 27, 2015, 4:38 AM
- As the telecom-network industry consolidates, Ericsson (NASDAQ:ERIC) is now more open to a bigger M&A deal in order to remain competitive in the market, Bloomberg reports.
- "I see no reason why we, given the right preconditions, would exclude a larger deal," Ericsson Chairman Leif Johansson said in an interview this month. "But as you know, there aren't that many left."
- CEO Hans Vestberg plans to gather with his top managers in June to discuss strategy, and a key area is what the company can do to counter Nokia's recent $16.6B acquisition of Alcatel-Lucent.
- Possible targets: Ciena (NYSE:CIEN), Infinera (NASDAQ:INFN) and Juniper (NYSE:JNPR)
May 4, 2015, 7:56 AM
- Cyan (NYSE:CYNI) +29.8% premarket after Ciena (NYSE:CIEN) agrees to acquire the networking software company in a cash and stock deal valued at ~$400M; the $4.75/share bid is a 30% premium to CYNI's Friday closing price.
- Ciena says the addition of Cyan "accelerates the availability of a complete solution for our customers to deliver virtualized networks and services on-demand."
- CYNI's stock had run up 46% YTD through Friday.
- Also: Cyan beats by $0.01, beats on revenue
Apr. 14, 2015, 10:17 AM
- Optical networking hardware vendors Ciena (CIEN +5.7%) and Infinera (INFN +2.4%) are higher after Nokia stated it's in talks to merge with Alcatel-Lucent, sparking hopes more telecom equipment industry M&A could be on tap. Microcaps MRV Communications (MRVC +9.7%) and Zhone (ZHNE +6.9%) are also faring well.
- Ciena and Infinera both compete against Alcatel in the optical transport/switching market. The Street might be betting Ericsson or another rival will respond to a Nokia/Alcatel deal by making an optical acquisition.
- Infinera (rallying less than Ciena) is a week removed from making a $350M+ bid for Swedish metro optical hardware vendor Transmode. Analyst reactions to the deal, which stands to significantly increase Infinera's metro market reach and European customer base, have been fairly positive
Nov. 20, 2014, 1:38 PM
- Optical networking hardware vendors and their component suppliers are turning in a good day. The gains come a day after component vendor Oplink announced it's being acquired by Koch Industries for $445M, and will be managed by connector maker Molex (a Koch subsidiary).
- RBC thinks Koch's entrance into the slumping component industry could trigger further consolidation. "Current fab utilization rates remain low ... with optical component vendors unable to charge a premium for their innovation. Gross margins are currently weighed by competitive pressures with optical component makers willing to cut pricing to account for high fixed costs."
- The firm believes Finisar (FNSR +1%) could be a buyer, and JDS Uniphase (JDSU +1.5%) and Oclaro (OCLR +7.1%) sellers. JDS, set to spin off its component unit, is facing activist pressure to put the business on sale.
- Meanwhile, Ciena (CIEN +2.8%) announced this morning it's partnering with Avaya to offer an enterprise solution that pairs its optical networking and integrated optical/Ethernet gear with Avaya's Ethernet switches. Like peers, Ciena is trying to lower its dependence on pressured carrier capex budgets.
- Other gainers: AFOP +3.7%. NPTN +3.3%. ADTN +2.7%. INFN +1.9%.
Aug. 14, 2014, 11:46 AM
- Ciena (CIEN +1.9%) is catching a bid following vague M&A chatter. The gains come even though Cisco just reported an 11% Y/Y drop in service provider orders for the July quarter, and stated it expects carrier demand to remain soft for several quarters.
- Ciena fell yesterday in response to JDS Uniphase's weak guidance and cautious CC commentary. Its FQ3 report is due on Sep. 4.
Jun. 17, 2014, 9:29 AM
- Cisco (CSCO) is buying Tail-f Systems, a Swedish provider of network orchestration software for carriers, for $175M in cash + retention incentives.
- Tail-f's software enables the rapid provisioning of apps/services over networks featuring hardware and virtual appliances from multiple vendors. Its offerings can be used to enable SDN implementations (likely of particular interest to Cisco), but can also work with more conventional networks.
- Light Reading notes AT&T and Deutsche Telekom are Tail-f clients - both are hatching big SDN initiatives that present challenges for Cisco - and that its revenue is believed to be below $30M. CEO Fredrik Lundberg insists Tail-f will continue its multi-vendor support post-acquisition.
- The purchase follows Cisco's 2012 acquisitions of network management/planning software firm Cariden and policy control software vendor BroadHop, and provides a fresh use for its offshore cash. Cisco has set a goal of doubling its software sales from 2012-2017.
- Carrier routing archrival Juniper bought network management software firm WANDL last year. Cyan (CYNI) is an independent player in the network orchestration space.
Feb. 4, 2013, 11:10 AM
A slew of telecom hardware and software firms are higher following Oracle's deal to acquire Acme Packet (I, II). The big winners include VoIP/unified communications software providers BroadSoft (BSFT +7.7%) and AudioCodes (AUDC +4.2%), and volatile deep packet inspection hardware plays Allot (ALLT +4.6%) and Procera (PKT +5.9%). Juniper (JNPR +1.4%), F5 (FFIV +1.2%), and Ciena (CIEN +1.6%) are also higher - Juniper is the frequent subject of M&A speculation, but its $11.7B market cap poses a challenge. (Sonus and Riverbed)| Feb. 4, 2013, 11:10 AM