DZS buys a big piece of AssiaDZS buys a big piece of Assia
CEO Charlie Vogt says the deal, which includes Assia's CloudCheck Wi-Fi and Expresse data analytics products, will be 'accretive from day one.' The Wi-Fi piece will put DZS in closer competition with Plume, AirTies and Minim.
May 2, 2022
DZS said it will add key Wi-Fi management and access network data analysts to its cloud-powered services platform by acquiring certain assets of Adaptive Spectrum and Signal Alignment, a company also known as Assia.
Assia, the company, will continue on with portions of its patents and other intellectual property. But DZS's asset acquisition is primarily focused on Assia's CloudCheck Wi-Fi experience management platform and Expresse data analytics and service assurance software platform for the access-network. The deal also includes Assia's Equipe (work-from-home productivity tech for businesses) and Commande (data collection for broadband service visibility) products, but DZS intends to discuss how those two pieces will fit into the mix at its May 12 investor day.
Figure 1: DZS is expected to share more details about the Assia transaction at its May 12 investor day.
(Source: Anna Berkut/Alamy Stock Photo)
The CloudCheck component will give DZS a Wi-Fi management system delivering elements such as parental control and security protection. That addition will effectively put DZS in closer competition with companies such as Plume, AirTies and Minim. It will also equip DZS with some new capabilities for its ongoing competition with suppliers such as Calix and Adtran.
DZS CEO Charlie Vogt said the general plan is to group the Assia assets under the company's cloud service umbrella, which was built on the company's acquisition of Rift last year. The Assia assets will provide additional network orchestration and software automation assurance tools that were already under development at Rift, he added.
About 110 people, including a group of cloud native software developers, will join DZS. Most are located in Silicon Valley and Madrid, Spain, along with a third-party developer center in Istanbul.
The agreement will give DZS new access (or expanded access) to a group of tier 1 service providers that includes Bouygues Telecom, Deutsche Telekom, Liberty Latin America, Lumen, TalkTalk Group, Telefónica and Telus.
DZS said Assia's technology is now deployed at about 60 service providers worldwide with some 125 million connected homes under contract. Vogt said Assia has already completed integrations with about 150 different customer premises equipment (CPE) devices from various suppliers.
Vogt, a telecom vet who took the helm of DZS in August 2020, said a near-term goal, upon closing, is to integrate Assia's software agents for DZS products, including about 20 million CPE units primarily comprised of optical network terminals (ONTs) and Wi-Fi devices. That piece should be wrapped up by Q3 2022.
'Accretive transaction from day one'
DZS has yet to disclose the financial terms of the all-cash deal and what kind of revenues Assia's been generating from the assets involved. But it noted that its recently filed $150 million S-3 shelf is not being used to fund the Assia transaction.
"This will be accretive transaction day one," Vogt said. "It's a real exciting recurring revenue opportunity for us."
He noted that DZS had previously placed a 40% target margin model and that the acquisition of Assia's assets and its software-as-a-service approach stands to pull that target timeline forward by about 12 months.
"Of all the transactions I've been involved with over the years, this one really has a game-changer-like profile to it," Vogt said talking about its potential to differentiate in the market. "I've probably put more energy into this one personally than I have most."
— Jeff Baumgartner, Senior Editor, Light Reading
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