Network test specialist EXFO hopes to expand its service assurance activities with the eventual acquisition of French mobile analytics firm Astellia. The pair have signed agreements for EXFO to acquire a 33.1 per cent equity stake in Astellia, worth €8.6 million, with plans to acquire the remaining equity.
Astellia provides network and subscriber intelligence via a vendor-independent, real-time monitoring and troubleshooting platform. Based in Rennes, France, the company has significant operations in Spain and a strong presence in Canada, Lebanon, Morocco and South Africa. It cites close partnerships with more than 120 telecom operators.
The transaction, which has strong support from Astellia’s management and reference shareholders’, allows for ‘a friendly industry combination’, according to the companies. It also makes another modest but necessary contribution to industry consolidation in the test and measurement space.
“This investment in Astellia is in line with our strategy to increase our critical mass and our client base, and to expand our addressable market in the global analytics and service assurance industry,” said Germain Lamonde, executive chairman of EXFO’s board of directors. “If our public tender offer is successful, we’ll be able to combine Astellia’s solutions and services with those of EXFO and become a world leader in the network monitoring and analytics sector and target growth opportunities such as network virtualization, 5G and the Internet of things.”
The deal with Astellia follows EXFO’s purchase of Ontology Systems, a network topology discovery specialist whose platform is used for network and customer service assurance, earlier this year (see EXFO acquires Ontology Systems for network automation).
Under the agreement with the founding shareholders of Astellia dated 30 August 2017, EXFO will acquire the entirety of their shares, representing an equity stake of 25.4 per cent, at a price of €10 per Astellia share. Those shares are currently held by Christian Queffelec, president of Astellia; Frederic Vergine, EVP, strategic customer engagements; Julien Lecoeuvre, chief technology and innovation officer; and Emmanuel Audousset, EVP, international accounts and indirect sales.
Concurrently, EXFO has signed an agreement with Isatis Capital to acquire a majority of its shares in Astellia at the same price, representing an equity stake of 7.7 per cent.
EXFO says the price of €10 per share it has proposed represents a premium of 44.7 per cent over Astellia’s closing share price on August 30, 2017, and of 56.1 per cent based on the 12-month volume weighted average price.
Astellia’s Board of Directors has expressed its support for EXFO’s firm offer and will seek an independent opinion and consult with Astellia’s workers councils, as per the applicable regulations.
Should the transaction progress as planned, EXFO will then initiate an all-cash voluntary public tender offer to acquire Astellia’s remaining shares at the same price. This values Astellia at approximately €25.9 million.
“We strongly support this strategic transaction with EXFO, whose values are shared by Astellia,” said Christian Queffelec, president of Astellia. “It will enable us to strengthen our ability to meet customer needs, widen our market coverage as well as foster our technological and commercial development.”
The proposed public offer will remain subject to the approval of French foreign investment authorities and the supervision of Autorité des marchés financiers, and other standard conditions. It is expected to close by the end of the year.
