Infinera to purchase Coriant for $430 million

Consolidation has hit the optical systems space, as Infinera has announced its intention to buy fellow optical transport and SDN platform vendor Coriant for a total consideration of $430 million in cash and stock. The acquisition is expected to close in the third quarter of 2018, subject to customary closing conditions.

Infinera positions the deal as an opportunity to scale in the ramp toward what it predicts in a press release announcing the transaction will be “the next wave of global network spending as network operators transform their networks to transition from 4G to 5G, from Optical Transport Network (OTN) to packet and from closed to open network architectures.” According to David Heard, product realization officer at Infinera, the acquisition increases both product breadth as well as customer base. He cited Coriant’s strengths in mobile networking as well as metro core, the latter of which will complement the metro access products Infinera gained when it acquired Transmode in 2015 (see “Infinera embraces Transmode, new products in metro portfolio“). Meanwhile, the acquisition will approximately double Infinera’s revenue. Post closing, the company will serve 9 of the top 10 global network operators (five of which will be new to Infinera) and the top six global internet content providers (three new to Infinera). The Infinera expects the new assets to prove “substantially accretive” in 2019, based on $100 million of identified cost savings in both cost of goods sold and operating expenses. The company predicts total cost synergies of $250 million through 2021.