02 Sep 2021
All-stock deal creating “Adtran Holdings” will see Adtran retain 54%, and Adva 46% ownership of new merged company.Adtran, based in Huntsville, AL, USA, has announced the acquisition of fellow optical networking technologies supplier Adva, Munich, Germany. The planned merging of the two firms will create a global provider of end-to-end optical fiber networking solutions for communications service providers.
The merged company will be renamed Adtran Holdings, Inc. following the closing of the deal, pursuant to Adtran’s all-stock exchange offer for 100% of Adva’s outstanding shares. The partners’ combined annual revenue is said to be $1.2 billion.
The joint statement of September 1st says that the deal will “combine Adtran’s leadership in fiber access, fiber extension and subscriber connectivity solutions with Adva’s leadership in metro wavelength division multiplexing, data center interconnect, business ethernet and network synchronization.”
Both companies operate in similar sectors – open, disaggregated solutions supporting the evolution of optical fiber networking. The combined business will offer a portfolio for providing homes, businesses and 5G infrastructure with scalable, secure and assured fiber connectivity, paired with cloud-managed Wi-Fi connectivity and SaaS applications that optimize the performance of the network and improve the customer experience.
Adtran’s Chairman and CEO Thomas Stanton, commented, “We are in the early stages of an unprecedented investment cycle in fiber connectivity, especially in the U.S. and Europe, fueled by the demand for last-mile fiber access to provide high-speed connectivity. By joining forces, our combined firm’s portfolio will better position us to capitalize on this global opportunity.”
Adva CEO Brian Protiva said, “The business combination is an outstanding opportunity to leverage the complementary nature of our customers and product portfolios and the compatibility of our companies’ businesses and culture. Our shared vision and passion for innovative networking solutions will benefit our customers through an enhanced value proposition, including a fully integrated end-to-end architecture for enterprise, access and metro core markets.”
The partners’ joint statement added, “the combination of Adtran and Adva is expected to create significant value for the shareholders of both companies, with approximately $52 million in pre-tax annual cost synergies realized within two years post-closing, driven by identified supply chain efficiencies and operating model optimization.”
Under the terms of the offer, each Adva share will be exchanged for 0.8244 shares of common stock in the new holding company. The offer is equivalent to €14.98 per Adva share based on Adtran’s 3-month VWAP (Volume-Weighted Average Price), as of August 27, 2021, representing a premium of 22% to Adva’s 3-month VWAP for the same time period, an equity value of €789 million, and an enterprise value of €759 million.
The new holding company will commence the public takeover offer after approval of the offer document by the German Federal Financial Supervisory Authority, which Adtran anticipates occurring in November 2021.
The companies anticipate completing the transaction during the second or third quarter of 2022, subject to receipt of required regulatory approvals. The combined company will be headquartered in Huntsville, and European HQ in Munich. It will be dual-listed on the NASDAQ and Frankfurt Stock Exchange.