(ADTN) ADTRAN Eyes Broadband Business

Alabama-based networking solution provider, ADTRAN Inc. (ADTN) recently announced plans to acquire Nokia Siemens Networks’ fixed-line Broadband Access business.

The deal is expected to close by April next year, upon regulatory approval from concerned authorities. According to ADTRAN, the acquisition is expected to remain neutral for the first fiscal year and thereon have a positive bearing on its diluted earnings per share.

The transaction would involve the acquisition of the intellectual properties, technologies and the established customer base of Nokia Siemens Networks’ Broadband Access unit. Further, it would entail the transfer of manpower to ADTRAN along with an entry into Nokia Siemens Networks’ established customer base.

Finland based Nokia Siemens Networks was established in 2007 as a joint venture between two giants, Nokia Corporation  (NOK) and Siemens AG (SI). Given the completion of the proposed acquisition, ADTRAN is expected to benefit from the widespread market presence of Nokia Siemens Networks across 150 countries including emerging markets like India, China and Africa.

Further, the deal will remain accretive to ADTRAN’s professional services in domestic and overseas markets and enhance business opportunities with Tier 1 and Tier 2 carries. The company remains focused on its strategy to build positions in new markets with additional business in the Frontier (FTR) acquired Verizon (VZ) properties and generate incremental sales from its new customer Telmex. Further, ADTRAN is moving into a new arena with the buyout of Bluesocket, a privately held U.S. company that specializes in wireless network solutions with virtual control system.

We believe this global expansion will contribute to ADTRAN’s growth trajectory over the next several years and be favorable for its 2012 strategy of expanding the international customer base.

Consequently, we are maintaining our long-term Neutral recommendation on the stock supported by a Zacks #3 Rank (Hold).

ADTRAN INC (ADTN): Free Stock Analysis Report

FRONTIER COMMUN (FTR): Free Stock Analysis Report

NOKIA CP-ADR A (NOK): Free Stock Analysis Report

SIEMENS AG-ADR (SI): Free Stock Analysis Report

VERIZON COMM (VZ): Free Stock Analysis Report

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