Summary:

Calix, a maker of next generation networking gear is buying Occam networks for $171 million in a stock and cash transaction. The deal values Occam at $7.75 a share — a 27 percent premium over current stock price and includes $3.84 a share in cash.

calixbroadband

Calix, a Petaluma, Calif.-based maker of next-generation broadband access gear said it will buy Occam Networks of Santa Barbara, Calif., for $171 million in a stock and cash transaction. The deal values Occam at $7.75 a share: a 27-percent premium for Occam’s current stock price. Nearly half that amount — about $3.84 a share – will be paid in cash. Calix is headed by CEO Carl Russo, formerly of Cerent, an optical startup that was acquired by Cisco Systems for about $8 billion towards the end of last decade.

Both companies make broadband access equipment and are primarily targeted at carriers (especially rural and independent carriers) that are building optics-based networks and offering triple-play services. Occam’s expertise is in IP and Ethernet, while Calix is particularly strong in fiber access. Calix went public in March of this year, and this is a good indication of company’s plans: Buy and bulk up fast.

Bottomline: As standalone companies, both Occam and Calix were too small and faced competition from much bigger rivals such as ADC Telecommunications. They also had incomplete portfolios. This is a good combination and a great opportunity for these companies to vie for business from some of the larger broadband service providers who typically opt for the Alcatel-Lucents and Huaweis of the world.

Related content from GigaOM Pro (sub req’d)Did We Really Learn Anything From the Dotcom Crash?

You’re subscribed! If you like, you can update your settings

Comments have been disabled for this post