Ekinops acquires OTN technology from Padtec for €10 million

Created June 10, 2019
News and Business

Ekinops, headquartered in Paris, France, a supplier of telecommunications solutions for telecom operators, has agreed to acquire the OTN-Switch (Optical Transport Network) platform developed by Padtec, an optical communications system manufacturer based in Brazil.

Ekinops Group’s cash resources and debt will finance the acquisition, for an amount of €10 million in cash. To strengthen its balance sheet, but subject to favourable market conditions, the Group says it plans to carry out a capital increase by private placement, for an amount capped at 10% of the capital stock.

OTN technology is used to switch data traffic over optical fibres, significantly optimising network bandwidth utilisation. The OTN technology developed by Padtec will allow Ekinops to meet growing market demand for this type of technology.

The purchaser stated, “This strategic acquisition will enable the Group to become a leader in this field and deliver additional revenue from new OTN products starting in 2020. It is estimated that over 40% of the optical network market already uses OTN solutions.”

Core networks

The rapid growth of data traffic on the Internet, which is fuelled by new services such as big data, cloud computing and 5G, requires the construction of new networks providing higher bandwidth (200G-400G) and meeting strict requirements in terms of latency, synchronisation and flexibility.

OTN technology provides a solution built around a scalable architecture, making it possible to rapidly increase switching capacity and support Packet Optical Transport (network layer 2). By developing a new generation of OTN products, Ekinops says it will meet the requirements of mobile operators, in particular for their 5G networks.

With this acquisition, Ekinops expects to be able to offer a complete OTN/DWDM solution for optical networks from early 2020, enabling flexible data traffic and support for the evolution of data speeds and protocols transmitted over 200-400G modulated optical wavelengths, eventually reaching 1Tbps.

The new product line will enable Ekinops to target the major operator core networks market segment with the objective to triple its optical transport product sales within 5 years.

Transaction terms

Through this transaction, Ekinops will acquire OTN technology and an R&D team comprising 25 engineers based in Campinas, near Sao Paulo, Brazil, for €10 million in cash. Brazilian operations will be overseen by Jean-Luc Pamart, co-founder of Ekinops and VP of R&D for optical transport.

Padtec CEO Manuel Andrade commented, “The acquisition of the OTN-Switch Platform by a globally recognised company such as Ekinops is a validation of the capability of Padtec’s engineers to develop state-of-the-art technologies deployable worldwide. Additionally, we are happy to enter into commercial agreements with Ekinops that will enable Padtec to offer the OTN-Switch on an OEM basis to our customer base in Latin America. This is a clear win-win agreement for both companies.”

Didier Brédy, Chairman & CEO of Ekinops, commented, “The OTN technology developed by Padtec is particularly innovative and will enable Ekinops to take a major technological and commercial leap forward in order to advance its position with leading telecom operators. The agreements with Padtec, the leading Latin American manufacturer and supplier of optical networking equipment, will also allow Padtec to source the OTN products it needs from Ekinops. This major strategic acquisition means that Ekinops can target to triple its sales of optical transport products within 5 years.”

For more information, visit www.ekinops.com

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This article was written
by Matthew Peach

Matthew Peach is a freelance technology journalist specialising in photonics and communications. He has previously worked for several business-to-business publishers, editing a range of high-tech magazines and websites.