India's Reliance Industries Snaps Up RadisysIndia's Reliance Industries Snaps Up Radisys

India's Reliance Industries, best known in the telecoms world for investing about US$5 billion to successfully launch Jio, the world's largest greenfield 4G operator, has opened its wallet again for an interesting bolt-on acquisition in the form of systems and software vendor Radisys.

Reliance Industries Ltd. (RIL) announced over the weekend that it had agreed to acquire Radisys Corp. (Nasdaq: RSYS) for US$1.72 per share in cash, or about $70 million in total, a significant premium over the vendor's closing share price of $0.70. (See Reliance Industries to Acquire Radisys.)

Not surprisingly, Radisys stock soared Monday by 108%, though that leap took it only to $1.46, some way short of RIL's offer, a suggestion that some potential investor wariness of the deal.

The price is small change for RIL, one of India's largest companies with operations across multiple industry verticals and annual revenues of about $66 billion.

It's certainly not buying Radisys to pump up its financials: The vendor, which perennially reports a loss, has been shrinking rapidly in the past few years as its sales of switches and off-the-shelf Advanced TCA (ATCA) hardware systems dwindled. For the full year 2017, Radisys reported revenues of $133.8 million, down 37% from 2016, and an operating loss of almost $47 million, compared with a loss of almost $10 million a year earlier.

RIL, it seems, might just be saving Radisys from the vendor scrap-heap.

The reason it's doing so is because Radisys has in recent years turned its focus to systems integration and software development that supports open systems and virtualization, with a particular focus on software-based media processing, virtualized radio access network capabilities -- including an early standards-based 5G software suite -- and software supporting the increasingly popular Central Office Redesigned as a Data Center (CORD) initiative.

That may not be bringing in much in the way of new revenues, but it has made Radisys a hot-bed of next-generation networking innovation (with an engineering team in Bangalore, India) and an important partner in many industry initiatives and groups (see links below).