Is Juniper The Next Takeover Target?
Chris DeMuth Jr. • 64 Comments
Chris DeMuth Jr. • 64 Comments
Dec. 28, 2015, 5:39 PM
Dec. 18, 2015, 2:13 PM
- Bloomberg reports Acacia (ACTG -11.6%) has lost its patent suit against Alcatel-Lucent (NYSE:ALU).
- Acacia had sued Alcatel for allegedly infringing its 4G patents. The companies settled an optical patent suit earlier this year. In 2012, Acacia bought mobile patent owner Adaptix for $160M.
- Earlier: Acacia drops 15.6%, gets halted
- Update (3:54PM ET): Acacia has confirmed the jury handling the suit ruled against it. "The jury returned a verdict that the asserted claims of U.S. Patent No. 6,870,808 were invalid and non-infringed. Adaptix, Inc. is currently studying the verdict to determine whether it will be filing an appeal." In addition to Alcatel-Lucent, Acacia/Adaptix had sued AT&T Mobility, Cellco Partnership, and Sprint Spectrum. Shares are down 20.6%.
Dec. 16, 2015, 10:20 AM
- Amid widespread solvency fears, DragonWave (NASDAQ:DRWI) has overhauled its reseller deal with Nokia (NYSE:NOK), while keeping the companies' "global frame agreements" in place.
- The specifics: 1) Nokia will remain DragonWave's main reseller channel for its Harmony Radio products. 2) DragonWave will continue providing software maintenance and hardware support to Nokia for joint product deployments. 3) The companies "may mutually agree on a case by case basis to address additional future specific customer requests of new DragonWave products through Nokia."
- The "Nokia channel" accounted for 37% of DragonWave's August quarter revenue of $26.9M, and 50% of its FQ1 revenue. The deal restructuring comes as Nokia gets set to merge with Alcatel-Lucent, a move that had stoked fears Nokia would abandon DragonWave's RF backhaul offerings for Alcatel's.
- DragonWave's market cap remains below $9M.
Dec. 4, 2015, 8:58 AM
- Nokia (NYSE:NOK) has completed the sale of its HERE mapping business to a consortium of German carmakers, including BMW (OTCPK:BAMXY), Daimler (OTCPK:DDAIY) and Audi (OTCPK:AUDVF).
- The transaction valued HERE at an enterprise value of €2.8B, subject to certain purchase price adjustments.
- Based on the current estimates of such adjustments, Nokia received net proceeds from the transaction of approximately €2.55B at closing.
- Previously: Nokia sells HERE maps unit for $3.07B (Aug. 03 2015)
Dec. 2, 2015, 4:08 AM
- Nokia (NYSE:NOK) shareholders are widely expected to approve the $16.6B takeover of French-American rival Alcatel-Lucent (NYSE:ALU) today at an extraordinary general meeting in Helsinki.
- The deal comes after the company obtained all necessary regulatory approvals last month from the U.S., France and China.
- Once the world's top mobile phone maker, Nokia hopes the merger will help it become the number one network equipment/service provider, with a combined revenue of nearly €25B ($26.5B).
Dec. 1, 2015, 5:34 PM
Dec. 1, 2015, 9:40 AM
- Credit Suisse's Kulbinder Garcha has upgraded Nokia (NOK +2.7%) and Alcatel-Lucent (ALU +2.4%) to Outperform ahead of the closing of their merger (set to occur in 1H16), and respectively hiked his targets to €9 ($9.54) and €4.95 ($5.25). Rival Ericsson (ERIC -1.7%) has been downgraded to Underperform, with its target cut to SKR75 ($8.65).
- Garcha expects Nokia/Alcatel to achieve significantly greater cost synergies than what management has forecast, as Nokia applies its "operational discipline" to Alcatel businesses. €1.7B/year worth of synergies are deemed possible by 2018 (guidance is for €900M), with €1.1B obtained by eliminating duplicate mobile infrastructure operating expenses and €480M by moving work to lower-cost regions. Altogether, he thinks the combined company's op. income (EBIT) could nearly double by 2018 to €4.3B.
- Regarding Ericsson, Garcha expects weak mobile infrastructure capex - he respectively forecasts 3% and 4% declines for 2016 and 2017 - to lead the company's revenue to drop 2% and 1% over the next two years. He also considers Street expectations for savings from cost-cutting efforts to be too high.
- Separately, Nokia has launched OZO, its 360-degree virtual reality camera array for professionals. Ozo, which will compete against a GoPro (NASDAQ:GPRO) VR array, sports eight cameras that each record at a 2K x 2K resolution, along with eight microphones and 500GB of storage. It's expected to ship in Q1, and will sell for a steep $60K.
- Last month: Ericsson slumps, takes Nokia/Alcatel with it after providing 2014-2018 growth outlook
Nov. 10, 2015, 1:33 PM
- At its Capital Markets Day, Ericsson (ERIC -6.5%) forecast its total addressable market will see a 2%-4% CAGR from 2014-2018, below the 3%-5% CAGR it forecast for 2013-2017 a year ago.
- The network equipment market - Ericsson's equipment sales skew heavily towards mobile - is expected to see a 1%-3% CAGR, the telecom services market a 3%-5% CAGR, and the support solutions market a 7%-9% CAGR. Year-ago forecasts for 2013-2017 were respectively at 2%-4%, 4%-6%, and 7%-9%.
- Ericsson aims to outpace its addressable market's growth via investments in "targeted areas" such as cloud services, IP networking, TV/media equipment, and carrier OSS/BSS software. The company forecasts a 10% CAGR for targeted areas. On a trailing 12 month basis, revenue from targeted areas totals SEK45B ($5.2B), up from SEK35B a year ago.
- By 2020, Ericsson wants to get ~20%-25% of its revenue from non-carrier customers, up from ~10% in 2014. It also wants to get over 75% of its revenue from services and software, up from 66% in 2014. A restructuring that was announced last year and aims for SEK9B ($1.03B) in annual savings by 2017 is said to be on track.
- Rivals Nokia (NOK -2.7%) and Alcatel-Lucent (ALU -2.6%), set to become one company in 1H16, are also off. Ericsson's forecasts come a day after the company announced a major partnership with switch/router giant Cisco, a deal viewed in part as an attempt to counter Nokia/Alcatel. Cisco rival Juniper, long the subject of Ericsson M&A speculation, sold off in response.
Oct. 29, 2015, 9:13 AM| Oct. 29, 2015, 9:13 AM
Oct. 29, 2015, 8:17 AM
- Ahead of the planned public exchange offer for Alcatel-Lucent, Nokia announces a €7B plan to optimize its capital structure - €4B in shareholder distributions and €3B in deleveraging.
- The distributions would be ordinary dividends of at least €0.15 per share for 2015 and 2016, a special dividend of €0.10 per share, and €1.5B in share repurchases over two years.
- The company also now sees itself achieving the €900M of operating cost synergies from the Alcatel-Lucent deal in full-year 2018, rather than 2019.
- Source: SEC Form 6-K
- Previously: Nokia beats by €0.01, misses on revenue (Oct. 29)
- NOK +8.1% premarket to $7.18
Oct. 29, 2015, 6:01 AM
- Alcatel-Lucent (NYSE:ALU): Q3 EPS of -$0.08 misses by $0.05.
- Revenue of €3.43B (+5.5% Y/Y).
Oct. 29, 2015, 5:15 AM
- Nokia (NYSE:NOK): Q3 EPS of €0.08 beats by €0.01.
- Revenue of €3.04B (-1.6% Y/Y) misses by €620M.
Oct. 28, 2015, 5:30 PM
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Oct. 21, 2015, 12:10 PM
- With China's Ministry of Commerce having approved earlier this week (follows an August announcement regarding a JV between Nokia and China Huaxin) and France's Ministry of Economy having signed off today, Nokia (NOK +0.4%) states it has received all the regulatory approvals needed for its all-stock purchase of Alcatel-Lucent (ALU +0.7%) to proceed with its exchange offer to Alcatel shareholders.
- As previously announced, Nokia is offering 0.55 shares for each Alcatel share. 50% of Alcatel shares need to be tendered - settlement is expected to happen in Q1 - and Nokia shareholders need to approve the deal.
- The post-merger company will contain a Mobile Networks unit consisting of Nokia/Alcatel's mobile infrastructure hardware and software; a Fixed Networks unit containing Alcatel's broadband access products; an Applications & Analytics unit containing both companies' telecom software and analytics assets, an IP/Optical unit containing Alcatel's routing, optical transport, and IP video hardware, as well as Alcatel SDN software startup Nuage; and the Nokia Technologies IP licensing/R&D unit.
- Both Nokia and Alcatel's Q3 reports arrive on Oct. 29.
Oct. 9, 2015, 8:50 PM
- Alcatel-Lucent (NYSE:ALU) will be the partner with Deutsche Telekom (OTCQX:DTEGY) on the ground side of the hybrid European Aviation Network.
- It'll handle the LTE deployment on a combination LTE/satellite service, and says it's run test flights of such a network with Deutsche Telekom. Last month Deutsche Telekom came to a partnership with Inmarsat (OTCPK:IMASY) to provide in-flight broadband.
- Inmarsat's S-band satellite will provide service in the same frequency as a new LTE ground network that DT will run.
- Lufthansa is set to be the first airline to test the hybrid service, in 2017.
Oct. 7, 2015, 3:46 AM
- Nokia (NYSE:NOK) executives are set to dominate the new leadership team that will arise following its proposed acquisition of Alcatel-Lucent (NYSE:ALU).
- Chief Financial Officer Timo Ihamuotila will stay in his job and altogether 10 out of a total 13 members in the planned leadership group will come from Nokia.
- The €15.6B all-share acquisition is still on track to close in the first half of 2016.
Nokia Oyj provides network infrastructure, technology and software services. It operates through four segments: Mobile Broadband, Global Services, HERE, and Nokia Technologies. The Mobile Broadband offers network solutions for mobile voice and data services through its Radio and Core clusters... More
Industry: Communication Equipment
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