Infinera Buys Competitor Coriant for $430M
By Tiernan Ray
Updated July 23, 2018 5:22 p.m. ET
barrons.com
Shares of fiber-optic networking-technology maker Infinera ( INFN) were halted this afternoon, after the closing bell, before the company announced it would spend $10 million in cash to acquire privately held Coriant, a vendor that has competed against Infinera in the so-called “data-center interconnect” market for equipment.
The deal also includes a stock component, for a total consideration of $430 million.
The shares currently don’t show any indicated time for trade resumption. The stock closed down 13 cents, or 1.5%, at $8.84 during the regular session.
The deal will double Infinera’s annual revenue, it said, and will be “substantially accretive in 2019, with $100 million saved on the cost of goods and on operating expenses, and $250 million to be saved through 2021. Coriant is debt-free, Infinera pointed out.
Infinera Chief Executive Tom Fallon said the deal would "strength our ability to serve the world’s largest network operators, accelerating our ability to leverage vertical integration and reinforcing our commitment to our long-term business model."
The deal is expected to close this quarter.
Infinera also said its revenue for Q2, ended June, will be “slightly higher” than its previously issued forecast for $203 million to $213 million, and that gross-profit margin will be at the high end of the forecast, and operating margin higher than forecast.
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