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Ekinops Eyes $64M Takeover of OneAccess

Iain Morris
3/30/2017

French optical equipment maker Ekinops says it is in talks to acquire routing specialist OneAccess in a cash-and-stock deal that would value OneAccess at about €60 million ($64 million).

Ekinops SA clearly has its eye on OneAccess's software expertise and range of access products, which largely address routing and IP service requirements (so layer 2 and 3 stuff). Combining those with its own optical (layer 1) goodies, it believes, will give rise to what it grandly describes as a "major player in optical transport and telecom network virtualization, present from the network core to the access, with a truly international dimension."

The move certainly appears to have been fueled by the prospect of convergence between transport equipment, Ethernet services and routing as virtualization gains traction.

OneAccess's customer base also holds appeal. Ekinops has largely catered to smaller carriers, it admits, but is starting to target bigger players. OneAccess, it says, already has a "solid and established presence with very large carriers." There is very little overlap between the customer bases of the two organizations, it seems.

Ekinops didn't have much to say about its own customer base but did indicate that OneAccess now serves about 130 telcos around the world. Some 29 of those are in the "global top 100," it says.

A combined company would report annual revenues of about €76 million ($81.5 million), with OneAccess responsible for about €58 million ($62.2 million) of those (so this looks like a case of the mouse swallowing the cat). It would also have about 400 employees internationally.

It would be a complicated deal, financially, but one that would ultimately leave OneAccess shareholders holding a stake of between 20% and 25% in the new-look business.


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So far, there are few details on leadership or other organizational changes that would follow a merger. Ekinops naturally hopes to realize "synergies" from the deal, but has not specified what these could be. But it does hope that a combination of its R&D and technology expertise with that of OneAccess will open up fresh business opportunities.

"By combining our technologies and our business assets, we could consolidate our positions and attack new, very high growth markets with a truly differentiated offer," said Didier Brédy, the chairman and CEO of Ekinops, in a company statement. "With the two companies' shared vision and strong software culture, we should be able to quickly create a great deal of value for our clients, employees and shareholders."

The current aim is to complete the transaction this summer.

Shares in Ekinops closed down 4.95% in Paris today, at €7.11, but remain about 44% higher than at the end of March 2016.

The company's share price soared last summer after French telecom incumbent Orange (NYSE: FTE) was reported to have included its 100G technology in network rollout plans. Ekinops also claims to have landed business with another Tier 1 player.

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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James_B_Crawshaw
James_B_Crawshaw
4/1/2017 | 7:58:32 AM
Re: Ekinops OneAccess
This looks like a great deal for EKINOPS. They made an EBITDA loss in 2015 and expectations were for the same in 2016. Actual results still pending. Ekinops is valued at about 2.7x 2016 sales which is clearly a lot higher than the 1x they are paying for Oneaccess. The difference presumably reflects growth expectations. EKINOPS grew revenue 20% last year. Still, I'd prefer Oneaccess 's 9% EBITDA margins over EKINOPS ' losses ...
Gabriel Brown
Gabriel Brown
3/30/2017 | 12:54:08 PM
Ekinops OneAccess
Interesting that the price 1 x sales.

OneAccess seems to have done well with its customer count, but there are a lot of vendors, big and small, in enterprise CPE.

 
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