Enablence Sells Off PON Systems
Enablence Technologies Inc. (Toronto: ENA) announced moves late on Monday that will close down the company's systems operations.
The Trident7 product line is being sold to cable access-gear specialist Aurora Networks Inc. for US$5.1 million, a deal expected to close by Sept. 15.
Aurora is expected to pick up 25 Enablence employees.
Enablence is also selling its MAGNM FX product line to FX Support LLC for undisclosed terms and expects to divest its International Systems business, based in Israel, by Sept. 30.
To top it off, Enablence is laying off about 40 employees, representing pretty much all that's left of its systems business in the U.S.
The company's focus will now be on its joint venture with China's Sunsea Telecommunications. The joint venture was supposed to have launched this summer; Enablence is now targeting the end of the year.
The Trident7 deal marks the second acquisition for privately held Aurora Networks, after GoBackTV Inc. in May. Aurora has about 250 employees and has been seeking ways to expand its business; at last check, its annual revenues were believed to be roughly $150 million.
Why this matters
Enablence is going back to its roots selling transceivers based on planar lightwave circuit (PLC) technology. New CEO Tim Thorsteinson took over in early 2010 and announced this direction (and the death sentence for systems) four months ago.
Enablence's goal had been to find markets for its planar lightwave circuit (PLC)-based PON transceivers, and former CEO Arvind Chhatbar had hoped that selling systems would be a better way to get the attention of big carriers. Optical networking is still a tough business for a small player, though, and Enablence's plan didn't work out.
For Aurora, adding Trident7 -- which Enablence acquired with Wave7 for $13.9 million -- can help in areas where cable operators happen to run telephony networks in addition to hybrid fiber/coax (HFC). Aurora already had EPON technology, and this deal will add GPON for the first time, said Scott Weinstein, Aurora's vice president of new business development.
Trident7 also will complement Aurora's portfolio of Radio Frequency Over Glass (RFoG) gear, which lets cable operators build fiber-to-the-home networks while preserving their headends, back-office systems and use of RF-based digital cable set-tops and Docsis modems. RFoG, targeted largely at greenfield areas, doesn't necessarily give MSOs much of a speed advantage, but it is designed to support PON overlays.
Here's a summary of Enablence's recent history and a little more about Aurora's situation.
- Enablence Details Aurora Deal
- Enablence Gives Up on Systems
- Aurora Networks Loads Up for M&A
- Aurora PON Module Adds Docsis Support
- Enablence Funds China Joint Venture
- Aurora Buys GoBackTV
- Enablence Partners in China
- Enablence Makes Its Tier 1 Bid
- Aurora Gets Some New Blood
- Enablence Reports Q3, Picks New CEO
- GoBackTV Lets Cable Cos. 'Drop In' IPTV
- Enablence CEO Stands by His Plan
- Enablence Acquires Wave7
- Enablence Trims Staff
- Enablence to Buy Pannaway
— Jeff Baumgartner, Site Editor, Light Reading Cable, and Craig Matsumoto, West Coast Editor, Light Reading