Ekinops completes OTN technology acquisition from Padtec

19 July 2019 | Laurence Doe

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Telecom vendor Ekinops has completed its €10 million acquisition of an optical transport network technology from Brazilian optical manufacturer Padtec.

The new rights to the Optical Transport Network-Switch (OTN-Switch) platform (pictured below), which can switch data traffic over fibres to optimise the use of network bandwidth, will strengthen Ekinops’s position in the major operator core networks market.

The acquisition, first revealed in May, will support Ekinops’s aim to triple its optical transport business growth within five years. The cash acquisition also includes an R&D team comprising 25 engineers based in Campinas, near São Paulo, Brazil, where operations will be overseen by Jean-Luc Pamart, co-founder of Ekinops and VP of R&D for optical transport.

“The agreement with Padtec, the leading Latin American manufacturer and supplier of optical communications equipment, also allows the Brazilian company to resell products with Ekinops’ OTN Switch technology,” said Didier Brédy, chairman and CEO of Ekinops, in an announcement about the partnership last month.

Ekinops plans to begin making additional revenue from new OTN products in 2020.

Ekinops stated: “The OTN technology will allow Ekinops to meet growing market demand for this type of technology. Over 40% of the optical network market uses OTN solutions. This strategic acquisition will enable the Group to become a leader in this field.”

The acquisition is financed by the group’s resources of €14.2 million in net cash as of 31 December 2018, and debt, with €6.5 million in bank loans as of Q2 2019.

Ekinops reported a “new peak in activity” in its Q2 2019 results, with the first half of the year producing a revenue increase of 7% to €45 million, compared with €42.1 million in 2018.

This is not the only recent deal Padtec has made to raise funds: it agreed to sell its submarine optical systems division to IPG Photonics, a US-based specialist in high power lasers and amplifiers.

Padtec has raised capital as part of a strategy to leverage DWDM technology research and development efforts.

“This agreement with Ekinops directly contributes to the increase in R&D investments for Padtec to offer ever more advanced solutions and services in order to make the company even more competitive, accelerating our business in Brazil and abroad,” said Manuel Andrade, Padtec CEO.

This month, Ekinops launched its Ekinops Channel Partner Program in Europe, Middle East and Africa as well as Asia-Pacific to support value-added resllers and systems integrators.

Last year Ekinops announced it was talking to Nokia about acquiring Alcatel Submarine Networks, but in April it said discussions had ended without agreement.