NETGEAR will acquire the Customer Networking Solutions (CNS) division of Westell Technologies, which supplies broadband networking products to U.S. telecommunications service providers, for approximately $33.5 million in cash. The CNS family of products enable high-speed transport and networking of voice, data, video and other advanced services over existing copper and fiber.
NETGEAR is acquiring a select team of Westell employees, including the CNS sales and marketing team, most of its customer base, its core CNS product and test engineering teams, nineteen patents and pending patent applications, proprietary technologies, current products, and products in development. The business relating to the assets that NETGEAR is acquiring generated approximately $39.5 million in net revenue for Westell during the twelve month period ended December 31, 2010.
Westell will retain certain customer relationships as well as its HomeCloud product line.
“This transaction will position NETGEAR as a leader in the U.S. telecommunications service provider home network equipment market. The addition of the CNS customer base that we are acquiring will allow us to accelerate our service provider revenue growth and strengthen our market position among North America Telecommunications operators. We believe that following completion of integration of the CNS business into NETGEAR that the transaction will not have an adverse impact on our overall company operating margins,” said Patrick Lo, Chairman and CEO of NETGEAR.
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