Wednesday, September 15, 2010

Calix to Acquire Occam, Reshaping Network Access Market

Calix will acquire Occam Networks in a stock and cash deal valued at approximately $171 million, which is approximately $7.75 per outstanding share of Occam Networks stock.

The merger brings together two leading suppliers of broadband network access systems for North America, the Caribbean, Latin America, and select global markets. The joint portfolio is expected to result in more access options over both fiber and copper for communications service providers to deploy, which could expedite the proliferation of advanced broadband services to both residential and business subscribers, including such services as high-speed Internet, IPTV, VOIP, Ethernet business services, and other advanced broadband applications.

Occam Networks, which is based in Santa Barbara, California, is known for its BLC 6000 multiservice access platform (MSAP), which leverages an integrated Ethernet backplane and Intelligent Blade Interconnect Architecture. Blades are used to deliver a wide array of services from copper, Gigabit Ethernet FTTP and GPON Triple Play residential services to MEF-certified carrier E-Line and E-LAN business services. In addition to service delivery, the blades provide wire speed Ethernet switching with multiple Gigabit Ethernet and 1 0Gigabit Ethernet ports that are used for blade interconnection, traffic aggregation and network transport. The company has shipped over three million BLC 6000 ports to over 380 service providers. In addition, its product portfolio includes optical network terminals and remote terminal cabinets. Occam's revenue for the second quarter of 2010 was $23.8 million.

Calix, which is based in Petaluma, California, also specializes in network access solutions. Its portfolio includes the EXA Powered C7 Multiservice Access Platform, which integrates legacy services and advanced access technologies with 10GE Ethernet and OC48 SONET transport. Its E-Series Multiservice Ethernet product is a smaller platform allows any mix of GPON, Active Ethernet, 10GE, and GE services. The company also offers its P-Series of optical network terminals (ONTs) for residential and business services, as well as business and mobile backhaul applications. It recently introduced a new Ethernet Service Access Node (ESAN) for offering VDSL2 services at remote nodes. Calix reported Q2 revenue of $71.7 million, an increase of 50% from revenue reported for the second quarter of 2009 of $47.8 million.

In a conference call, the companies said their short term objectives include integrating Occam's BLC into the Calix unified access portfolio, enabling the platform to run side-by-side on the same Ethernet rings and integrated into the same management system. The ONT products will be combined so as to offer the widest selection in the industry, and the portfolio will be enhanced to support a wider range of voice protocols.

"The rate of change is accelerating for communications service providers, and Calix is fully committed to providing our customers with the broadest portfolio of innovative access network options to adapt to this changing world," said Carl Russo, president and chief executive officer of Calix. "By combining Occam Networks' expertise in IP and Ethernet, Calix's strength in fiber access, and both companies' experience in copper access, we believe there is a clear opportunity to further enhance the Calix Unified Access portfolio, accelerate its future innovation, and enable greater broadband deployment by communications service providers globally."

Calix expects to complete the acquisition in the fourth quarter of 2010 or first quarter of 2011, subject to Occam Networks stockholder approval, receipt of required regulatory clearance and the satisfaction of certain other customary closing conditions.

  • Calix complete its initial public offering in March 2010.