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Ethernet equipment

CTDI Acquires More Access Assets

West Chester, Pa.-based Communications Test Design Inc. (CTDI) has acquired again. This time, the target was Alloptic Inc. , a PON equipment vendor that very recently started making headway in the Radio Frequency Over Glass (RFoG) space. (See Who Makes What: RFoG Systems and Moto, Alloptic Tag-Team on RFoG .)

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
Month Year Acquired
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

DCITDave 12/5/2012 | 4:39:56 PM
re: CTDI Acquires More Access Assets Almost certainly. They seem to be very opportunistic, picking technologies that come from troubled companies, but whose gear they already know well because of support and repair calls.
Tesla_x 12/5/2012 | 4:39:56 PM
re: CTDI Acquires More Access Assets

"picking technologies that come from troubled companies, but whose gear they already know well because of support and repair calls"


 


Makes more sense if they pick up a company with a healthy balance sheet and equipment that could replace the troubled company tech.


Tesla_x 12/5/2012 | 4:39:56 PM
re: CTDI Acquires More Access Assets

"We are known for our legacy business, but when customers are talking about 10-gig EPON, we want our name to be brought up."


 


Makes one wonder if they have more acquisition targets ahead?


Tesla_x 12/5/2012 | 4:39:55 PM
re: CTDI Acquires More Access Assets

Only if sales of the new equipment were not what the market and customers needed going forward anyway, and margins of said equipment as well.


Worth watching at any rate, just to see who/what tech they put their eyes on next.


 

DCITDave 12/5/2012 | 4:39:55 PM
re: CTDI Acquires More Access Assets It would be more expensive and time-consuming, too.
DCITDave 12/5/2012 | 4:39:52 PM
re: CTDI Acquires More Access Assets They may have grander ambitions but I don't know. It's clear they they don't have the pressure to satisfy shareholders or VCs so I think a long-running profitable enterprise suits them, even if it's not terribly ambitious by industry standards.
paolo.franzoi 12/5/2012 | 4:39:52 PM
re: CTDI Acquires More Access Assets

 


It is not just that the company would be more expensive.  It would be a different kind of business,


With businesses that are ramping down you don't need roadmaps with development, marketing to acquire new customers, or any of the more speculative parts of R&D.


What CTDI is doing is turning maintenance, repair, and some additional unit sales businesses into a cash stream.  It can be an effective business financially, but is limited.  There is no upside, but on the other hand costs are well known.


seven


 

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