Alabama-based networking solution provider,
) recently announced the completion of its acquisition of Nokia
Siemens Networks' ("NSN") fixed-line Broadband Access business.
Finland based NSN was established in 2007 as a joint venture
between two giants,
Last December, the company announced its plan to acquire Nokia
Siemens' Broadband Unit. As projected, the deal has reached its
settlement in the first half of this year.
The transaction involves the acquisition of the intellectual
properties, technologies and the established customer base of NSN's
Broadband Access unit. Further, it would entail the transfer of
manpower to ADTRAN.
The deal will remain accretive to ADTRAN's professional services
in domestic and overseas markets and enhance business opportunities
with Tier 1 and Tier 2 carries. The company remains focused on its
strategy to build positions in new markets with additional business
from Tiered carriers like
) and generates incremental sales from its new customer Telmex.
Further, ADTRAN is moving into a new arena with the buyout of
Bluesocket, a privately held U.S. company that specializes in
wireless network solutions with virtual control system.
We believe this global expansion will contribute to ADTRAN's
growth trajectory over the next several years and be favorable for
its 2012 strategy of expanding the international customer base.
However, over the near term, we expect the acquisition expenses
to continue to weigh on the company's financials. This remains
evident by the company' first quarter 2012 earnings results that
were significantly below its year-ago performance. As expected by
the company, expansion plans, acquisition expenses and increased
overseas activities affected the earnings results. ADTRAN's
earnings were hurt by expenses related to the acquisitions of
Bluesocket Inc. and NSN's fixed-line Broadband Access business.
We are maintaining our long-term Underperform recommendation on
the stock supported by a Zacks #5 Rank (Strong Sell).
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