Adva Optical Networking has jumped into the M&A fray, acquiring MRV Communications for $69 million in a bid to enhance its product portfolio and expand its customer footprint.
According to the terms of the agreement, Adva will make a tender offer of $10 per share for all the outstanding common stock of California-based MRV. The offer has been approved and unanimously recommended by the boards of both companies.
While the acquisition still has to meet customary closing conditions, including the tender of at least a majority of MRV Communications' outstanding shares of common stock, Adva says purchasing MRV will further strengthen its portfolio of optical, Ethernet and software solutions and expand its customer base, especially outside of Europe.
Adva said it expects to complete the MRV acquisition in August or September of 2017.
MRV has been a relatively profitable company, recording $80.3 million in revenues for 2016. In its most recent quarter, which ended in March, MRV Communications reported revenues of $21.2 million and cash and cash equivalents of $21.7 million and listed no debt.
“MRV Communications Inc.'s technology and talent will strengthen our own product set and help us to deliver even more value to our customers,” said Brian Protiva, CEO of Adva Optical Networking, in a release. “Our combined teams present the marketplace with an incredibly compelling skill set and technology base."
If completed, the MRV acquisition will be Adva's second largest in recent years, following its purchase of Overture last January. By acquiring Overture, Adva strengthened its Carrier Ethernet portfolio and created its Ensemble NFV product suite, which was selected as a virtual uCPE solution by Verizon earlier this year.
Using Adva’s Ensemble Connector’s zero-touch provisioning enables Verizon to drop-ship servers directly from the COTS supplier to the end customer, simplifying supply chain logistics. Ensemble Connector further simplifies operational processes with access to a large collection of virtual network functions.
ADVA Optical Networking's continued success across a range of customer segments led to the posting of what it said was record first-quarter revenues in April 2017. The vendor reported first-quarter revenues of $161 million, up 16.3% year over year from $139 million in the first quarter of 2016.