NETGEAR (Nasdaq: NTGR) is going to purchase Westell's (Nasdaq: WSTL) Customer Networking Solutions (CNS) division for about $33.5 million.
Already providing its CPE gear to Verizon Communications (NYSE: VZ) and Cincinnati Bell (NYSE: CBB), Westell's CNS division produced about $35.9 million in revenue in 2010.
As part of the agreement, which the two companies expect to close in Q2 2011, Westell will be able to keep some of its customer relationships and its HomeCloud product line.
The deal has significance, albeit different, for both vendors.
Although Westell has been synonymous with broadband gateways and modems, Rick Gilbert, Westell's chairman and chief executive officer, said it "allows us to focus on our more profitable Outside Plant Systems and Conference Plus divisions."
But for NETGEAR, which reported Q4 revenues increased 18 percent, the opportunity is set on gaining a bigger foothold in the U.S. telecom market.
Patrick Lo, NETGEAR's Chairman and Chief Executive said that the "addition of the CNS customer base that we are acquiring will allow us to accelerate our service-provider revenue growth and strengthen our market position among North America telecommunications operators."
For more:
- see the Westell release
- Total Telecom via Dow Jones Newswires has this article
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