The merger will create an entity with a combined revenue of $1.2 billion, with the company taking aim at the booming global fibre market
On Monday, US-based fibre specialist Adtran announced that it will acquire German firm ADVA for €789 million (around $934 million). The companies expect the resulting entity to have a revenue of $1.2 billion, with the move reportedly creating synergies worth $52 million in the next two years.
Adtran shareholders will own around 54% of the combined entity, with ADVA shareholders holding the remaining 46%. The new business will be led by executives from both companies, with Adtran CEO Thomas Stanton at the head of the combined entity.
The motivation here is obvious enough. Fibre is being deployed at an incredible pace in numerous markets around the world and this merger between US and German companies should give both better access to their partner’s market. Perhaps even more importantly, the two companies have broadly complementary portfolios, with Adtran offering network hardware and ADVA supplying metro wavelength division multiplexing, data centre interconnect, business ethernet, and network synchronisation solutions.
“We are in the early stages of an unprecedented investment cycle in fibre connectivity, especially in the U.S. and Europe, fuelled by the demand for last-mile fibre access and middle-mile transport to provide high-speed connectivity to homes, businesses and future 5G infrastructure,” explained Stanton. “By joining forces, our combined firm’s portfolio will better position us to capitalize on this highly compelling global opportunity. We expect the transaction will create significant long-term value for both companies’ stakeholders by increasing our scale and improving our ability to serve as a trusted supplier for customers worldwide.”
The companies suggest that the combination will help to create an “expanded, secure and more-comprehensive portfolio for government networks and critical infrastructure”. It will leave both companies with greater scale with which to capitalise on the booming fibre market.
According to the company’s the deal is expected to close in Q2 or Q3 of 2022, assuming regulatory approval.
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