MRV to Sell Assets

Vendor invests in core optical communications systems business

August 10, 2012

3 Min Read

CHATSWORTH, Calif. -- MRV Communications, Inc. (MRVC) ("MRV" or the "Company"), a leading provider of optical communications network infrastructure equipment and integration and managed services, today announced the conclusion of its previously announced exploration of strategic alternatives. MRV has determined to divest its Network Integration businesses and retain, build and invest in its core Optical Communications Systems ("OCS") business. The long-term growth prospects for the optical transport and carrier Ethernet markets reinforce MRV's decision to build its OCS business. MRV's OCS products are well positioned in the marketplace and are known for their rich feature set, for their ability to improve the efficiency of their customers' networks, and for the industry-leading bandwidth to power consumption ratio of its products.

"After a careful and thorough review of our businesses and the markets we serve, the management team and Board of Directors determined that the best course of action for MRV is to pursue divestiture of our Network Integration subsidiaries in Europe and retain and expand our OCS business," said Barry Gorsun, chief executive officer of MRV.

"During our strategic review process, it became very apparent that there is real value in the OCS technology platform and that we are well positioned in the optical transport and carrier Ethernet markets and specifically in the rapidly growing mobile backhaul data center and cloud computing verticals. We believe that we could best serve our stockholders and customers by leveraging these strengths to deliver innovative new products to the high growth segments of our markets. This decision was reinforced by a top tier service provider who recently selected MRV's OptiSwitch and ProVision solutions for an international metro-Ethernet deployment. In fact, we have already started shipping against this contract."

Gorsun continued, "Rising demand for bandwidth intensive applications, mobility and cloud computing are the catalysts forcing carriers to upgrade their infrastructure to next-generation networks. Recent market data estimates that the subsets of these markets that MRV addresses are poised for solid long-term growth, despite the current challenging macroeconomic spending environment. Service providers around the globe have come to expect best-in-class products and services from MRV and we intend to build upon this tradition to drive growth and increase our market share over the long term."

For over 20 years, MRV has been providing innovative and award winning solutions to the market. MRV's OCS division is an end-to-end provider of optical communications network infrastructure equipment that facilitates access, transport, aggregation and management of voice, data and video traffic in networks, data centers and laboratories used by telecommunications service providers, cable operators, enterprise customers and governments worldwide.

MRV's OCS division serves the optical transport and carrier Ethernet markets for telecommunications service providers and large enterprises around the globe from the edge to the core of the network. Infonetics Research, Inc. forecasts that the optical transport and carrier Ethernet markets will grow at a compound annual growth rate of 12 percent and 6 percent, respectively, through 2016. These markets are being driven by the proliferation of network traffic due to the increase in 4G mobile network upgrades, cloud computing, data center services, business services, wholesale exchanges, and the systematic conversion to packet-based networks as operators attempt to fill the ever-increasing demand for bandwidth and complex services.

MRV's award winning product families include the OptiSwitch carrier Ethernet, FiberDriver and LambdaDriver optical transport, ProVision element management system and MCC and LX infrastructure management solutions.

As set forth in MRV's preliminary proxy statement filed on Schedule 14A with the Securities and Exchange Commission ("SEC") on August 9, 2012, the Company is seeking stockholder approval for two transactions in the Company's Network Integration business. The Company has entered into a sale purchase agreement for the sale of its French subsidiary, Interdata, and it has entered into a letter of intent which anticipates a potential sale of its Swedish subsidiary, Alcadon-MRV AB. MRV has also retained the investment bank Headwaters BD, LLC, to evaluate and explore strategic alternatives for its Italian subsidiary, Tecnonet S.p.A. A detailed discussion of MRV's proposed sale of Interdata and Alcadon can be found in its preliminary proxy statement on file with the SEC.

MRV Communications Inc. (Nasdaq: MRVC)

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