This isn't breaking news, by the way. The deal actually happened back in February and it's worth noting that Nyquist Capital 's Andrew Schmitt, now of Infonetics Research Inc. fame, had the "CTDI looks to buy Alloptic" rumor on his message boards months ago.
But the story of 35-year-old CTDI is more interesting by the day. With five acquisitions since June 2008, the company is making a meal out of miles of telecom equipment leftovers. This latest snack points to a couple of key trends in the life of CTDI, according to Brian Parsons, VP of CTDI's products division.
First, Alloptic's gear gives CTDI its first product built for cable MSOs. The customer set for Alloptic's RFoG equipment includes Tier 1 and Tier 2 cable operators who want to provide fiber-to-the-home services, eventually, but don't want to lose the investment they've already made in their cable modem termination system (CMTS) gear and cable modems.
Second, Parsons says this is a step forward for CTDI because it revolves around more forward-looking technology. CTDI has been mostly famous for taking over product lines near the end of their lives and keeping them going on behalf of telco customers. Indeed, the last time Light Reading took a look at the engineering, repair, and logistics outfit, it had just taken on Motorola Inc. (NYSE: MOT)'s fiber-to-the-node product family. (See Moto Finishes FTTN Fare.)
Table 1: CTDI: Some Recent Acquisitions
|February 2010||A portfolio of RFoG and passive optical network equipment from Alloptic.|
|July 2009||The Fiber-to-the-Node (FTTN) product family from Motorola.|
|October 2008||The FlexAccess 9000 and the C8000+4 line of digital loop carriers from Conklin-Intracom.|
|August 2008||Phoenix Wireless, a leading provider of wireless communications and electronics accessories.|
|June 2008||The Verilink line of integrated access devices, access routers, optical access devices, and bandwidth aggregators from Verso Technologies.|
|December 2007||The AccessNode product family from Zhone Technologies.|
|June 2006||GoDigital Networks, a DSLAM and digital loop carrier vendor.|
|Source: Light Reading, CTDI|
CTDI is best known for keeping legacy products alive and for its engineering and repair expertise. Indeed, five of the company's six divisions are groups focused on providing services. Parsons, however, leads the small and growing products group, where CTDI is buying and adding to its own product lines that it sells to telcos and MSOs directly.
Parsons says family-owned CTDI now has around 5,000 employees, and keeps 45 locations in 12 countries around the world while bringing in between $800 million and $900 million in revenues per year. The products group Parsons leads has about 120 employees, with most of the building work handled by contract manufacturers. The deal with Alloptic allowed CTDI to take on Alloptic's Silicon Valley facility, key engineering and R&D staff, as well as some product sales folks.
So, while CTDI is known for maintenance and legacy equipment operations -- the company was recently asked to make parts for AT&T Network Systems Inc.'s 1A ESS telephone switch -- it is also looking to put its years of access equipment R&D to work by buying and improving products that perhaps have a longer lifespan than the companies that created them.
Parsons says: "We are known for our legacy business, but when customers are talking about 10-gig EPON, we want our name to be brought up."
— Phil Harvey, Editor-in-Chief, Light Reading