Ekinops has signed a definitive agreement to acquire the OTN-Switch (Optical Transport Network) platform developed by Brazil-based Padtec, in a deal financed by the group’s cash resources (€14.2 million net cash at December 31, 2018) and debt.
The company raised €6.5 million of bank loans in the second quarter of 2019 and plans to carry out a capital increase by private placement over the coming weeks, for an amount capped at 10 per cent of the capital stock.
With this acquisition, Ekinops expects to be able to offer a complete OTN/DWDM solution for optical networks from early 2020, enabling flexible data traffic and support for the evolution of data speeds and protocols transmitted over 200-400G modulated optical wavelengths, eventually reaching 1Tb/s (terabit per second). This will enable the company to target the major operator core networks market segment, with the objective to triple its optical transport product sales within five years.
The transaction will also allow Ekinops to acquire OTN technology and a research and development team of 25 engineers based in Campinas, near Sao Paulo (Brazil) for €10 million in cash. Brazilian operations will be overseen by Jean-Luc Pamart, co-founder of Ekinops and VP of research and development for optical transport.
To strengthen its balance sheet, the Group plans to carry out a capital increase over the coming weeks, provided that market conditions are favourable. It will take the form of a private placement with qualified investors for an amount capped at 10% of the capital stock. The major shareholders sitting on the Board of Directors, Aleph Golden Holdings Sarl and Bpifrance, have notified the company of their intention to take part.
This acquisition is subject to conditions, but is expected to close in quarter three of this year.
Padtec CEO Manuel Andrade said: ‘The acquisition of the OTN-Switch Platform by a globally recognized company such as Ekinops is a validation of the capability of Padtec’s engineers to develop state-of-the-art technologies deployable worldwide. Additionally, we are happy to enter into commercial agreements with Ekinops that will enable Padtec to offer the OTN-Switch on an OEM basis to our customer base in Latin America. This is a clear win-win agreement for both companies.’
Didier Brédy, chairman & CEO of Ekinops, added: ‘The OTN technology developed by Padtec is particularly innovative and will enable Ekinops to take a major technological and commercial leap forward in order to advance its position with leading telecom operators. The agreements with Padtec, the leading Latin American manufacturer and supplier of optical networking equipment, will also allow Padtec to source the OTN products it needs from Ekinops. This major strategic acquisition means that Ekinops can target to triple its sales of optical transport products within five years.’
