ADVA's Still Shopping

Acquiring Covaro Networks Inc. may not be the end of ADVA Optical Networking's (Frankfurt: ADV) spending spree, according to ADVA's chief marketing and strategy officer Brian McCann. (See ADVA Snaps Up Covaro.)

McCann says that, although Covaro gives ADVA the North American customers and staff it wanted, the company will continue to look at acquisition opportunities in the metro optical Ethernet market. (See ADVA Eyes Movaz, Meriton.)

"We continue to talk to other companies in the optical Ethernet space, and we'll review other opportunities as we continue to seek ways to ramp up our revenues," says McCann.

He adds that some prospective targets have valued themselves out of contention. "Covaro gave us the right value proposition. That has been a stumbling block in some other cases."

Once the acquisition is complete, Covaro will bring about 55 staff, and more than 60 service provider customers. Covaro's VP of marketing, Fred Ellefson, says about "10 percent of those customers are Tier 1 carriers, and we're hoping to announce one of the Tier 1 users in the U.S. in the near future," as well as some business in the Asia/Pacific region.

The acquisition gives ADVA a ready-made position in the Ethernet access market, which is a good place to be right now, reckons Stan Hubbard, senior analyst at Heavy Reading.

"This appears to be a solid move on the part of both players, and it really drives home the point that the Ethernet access market is heating up. Comments from carriers at Light Reading's Ethernet Expo last week and at the Carrier Ethernet World Congress in Berlin a few weeks ago revealed strong interest in the types of platforms that Covaro offers." (See Ethernet Expo: Shop 'Til You Drop and Ethernet Expo: It's Raining Packets.)

Hubbard adds: "ADVA already has been supporting Ethernet services with its Ethernet-over-WDM and FSP 150 Ethernet-in-the-first-mile solutions, and the Covaro acquisition is a nice way to round out its portfolio."

— Ray Le Maistre, International News Editor, Light Reading