Infinera bids to acquire Transmode in optical power play

Optical networking vendor Infinera has announced its recommended public offering to acquire all shares of Transmode AB. Transmode, a Swedish firm, specialises in metro packet optical infrastructure, which Infinera is targeting in order to flesh out its holistic optical networking portfolio of products.

The offer is a cash plus shares valuation for existing Transmode shareholders, with a total valuation of roughly £235 million. The Transmode board was apparently unanimous in its agreement to recommend shareholders accept the offer from Infinera.

“The independent members of the Board of Directors of Transmode have unanimously decided to recommend the offer from Infinera and see benefits in the combination,” said Helena Nordman-Knutson of the independent Transmode Board. “The share portion of the consideration allows Transmode shareholders to take part in the anticipated benefits of the combination.”

Infinera’s CEO, Tom Fallon, highlighted the potential opportunities for the vendor upon the completion of the acquisition.

“The acquisition of Transmode accelerates the realisation of our long held vision of providing an end-to-end portfolio of world class optical transport products,” he said. “Further, the combination ensures we are well positioned to be a leading provider in the metro aggregation market as this market transitions to 100G. Transmode’s services-rich metro platforms, broad European customer base and profitable business model are naturally complementary to Infinera. We are also excited to have the Transmode team join Infinera and leverage our shared cultures of customer first, product excellence and profitability.”

It’s worth noting that the strategic move from Infinera isn’t a monopolisation attempt in the optical market. Traditionally, Infinera’s strongest market and areas of expertise focus on long-haul optical networking in North America. Transmode, meanwhile, is heavily entrenched in the European market, specialising in metro optical packet networking.

What it does mean, however, is that Infinera will benefit from a more complete DWDM (dense wavelength division multiplexing) optical networking product suite to bring to the service provider community.