In order to expand its business globally,
), a leading diversified manufacturer of telecom equipment, has
chosen temple as an authorized distributor of its Optical LAN
temple is a private entity which mainly focuses on the
distribution of infrastructure connectivity systems for the
enterprise data and telecommunications markets. Hence, we believe
that by assigning temple as the primary global distributor will
help Tellabs to easily penetrate the European, Middle East and
African (EMEA) markets. Tellabs' PartnerPlus Program will
strengthen its bonding with distributors, value-added resellers
and system integrators globally.
Tellabs' Optical LAN is a perfect substitute for traditional
copper-based Ethernet LANs, which will save at least 80% more
energy. Moreover, it slashes costs and space requirements for any
organization by up to 70% and 90%, respectively.
The Optical segment of Tellabs, which develops these popular
Optical LAN products, accounts for a major portion of the
company's revenues. During the third quarter of 2013, it
generated 45% of the total revenue. In the same quarter, rest of
the world produced $93.4 million (47% of total revenue) as
against $138.1 million (52% of total revenue) recorded in the
Hence, we believe that the recent deal with temple will not only
help the company gain market traction globally but will also
drive its top line, going forward.
Meanwhile, Tellabs has decided to become a private entity. On Oct
21, 2013, Tellabs declared that the company has entered into a
definitive merger agreement with private equity firm, Marlin
Equity Partners, which will acquire all outstanding shares of
Tellabs for $2.45 per share in cash. The total deal size will be
approximately $891 million. This deal is expected to close by the
fourth quarter of 2013 and is not subject to a financing
Other Stock to Consider
Tellabs currently has a Zacks Rank #3 (Hold). Other stocks in
this segment, which are worth considering, include
Ubiquiti Networks, Inc.
Motorola Solutions Inc.
). While ShoreTel and Ubiquiti Networks currently have Zacks Rank
#1 (Strong Buy), Motorola Solutions has a Zacks Rank #2
MOTOROLA SOLUTN (MSI): Free Stock Analysis
SHORETEL INC (SHOR): Free Stock Analysis
TELLABS INC (TLAB): Free Stock Analysis
UBIQUITI NETWRK (UBNT): Free Stock Analysis
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