Optical equipment specialist says the deal will open up virtualization opportunities and give it access to Tier 1 service providers.

Iain Morris, International Editor

March 30, 2017

3 Min Read
Ekinops Eyes $64M Takeover of OneAccess

French optical equipment maker Ekinops says it is in talks to acquire routing specialist OneAccess in a cash-and-stock deal that would value OneAccess at about €60 million ($64 million).

Ekinops SA clearly has its eye on OneAccess's software expertise and range of access products, which largely address routing and IP service requirements (so layer 2 and 3 stuff). Combining those with its own optical (layer 1) goodies, it believes, will give rise to what it grandly describes as a "major player in optical transport and telecom network virtualization, present from the network core to the access, with a truly international dimension."

The move certainly appears to have been fueled by the prospect of convergence between transport equipment, Ethernet services and routing as virtualization gains traction.

OneAccess's customer base also holds appeal. Ekinops has largely catered to smaller carriers, it admits, but is starting to target bigger players. OneAccess, it says, already has a "solid and established presence with very large carriers." There is very little overlap between the customer bases of the two organizations, it seems.

Ekinops didn't have much to say about its own customer base but did indicate that OneAccess now serves about 130 telcos around the world. Some 29 of those are in the "global top 100," it says.

A combined company would report annual revenues of about €76 million ($81.5 million), with OneAccess responsible for about €58 million ($62.2 million) of those (so this looks like a case of the mouse swallowing the cat). It would also have about 400 employees internationally.

It would be a complicated deal, financially, but one that would ultimately leave OneAccess shareholders holding a stake of between 20% and 25% in the new-look business.

For more NFV-related coverage and insights, check out our dedicated NFV content channel here on Light Reading.

So far, there are few details on leadership or other organizational changes that would follow a merger. Ekinops naturally hopes to realize "synergies" from the deal, but has not specified what these could be. But it does hope that a combination of its R&D and technology expertise with that of OneAccess will open up fresh business opportunities.

"By combining our technologies and our business assets, we could consolidate our positions and attack new, very high growth markets with a truly differentiated offer," said Didier Brédy, the chairman and CEO of Ekinops, in a company statement. "With the two companies' shared vision and strong software culture, we should be able to quickly create a great deal of value for our clients, employees and shareholders."

The current aim is to complete the transaction this summer.

Shares in Ekinops closed down 4.95% in Paris today, at €7.11, but remain about 44% higher than at the end of March 2016.

The company's share price soared last summer after French telecom incumbent Orange (NYSE: FTE) was reported to have included its 100G technology in network rollout plans. Ekinops also claims to have landed business with another Tier 1 player.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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About the Author(s)

Iain Morris

International Editor, Light Reading

Iain Morris joined Light Reading as News Editor at the start of 2015 -- and we mean, right at the start. His friends and family were still singing Auld Lang Syne as Iain started sourcing New Year's Eve UK mobile network congestion statistics. Prior to boosting Light Reading's UK-based editorial team numbers (he is based in London, south of the river), Iain was a successful freelance writer and editor who had been covering the telecoms sector for the past 15 years. His work has appeared in publications including The Economist (classy!) and The Observer, besides a variety of trade and business journals. He was previously the lead telecoms analyst for the Economist Intelligence Unit, and before that worked as a features editor at Telecommunications magazine. Iain started out in telecoms as an editor at consulting and market-research company Analysys (now Analysys Mason).

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