Agilent Technologies Inc. moved early last week to flesh out its presence in the network test and measurement market with the $665 million acquisition of Objective Systems Integrators Inc.
Wall Street seemed to agree with Agilent executives’ and industry analysts’ positive view on the acquisition-Agilent’s stock continued its slow climb after the announcement to hover around $52 a share.
Agilent executives said the acquisition would bolster the company’s test and measurement offerings to create a one-stop testing source for communications providers.
“The OSI-Agilent combination will dramatically strengthen our position in a very high-growth, high-margin market,” said Tom White, Agilent’s senior vice president for the company’s communications solutions group, during a conference call. “OSI’s open platform will enable us to offer truly integrated, end-to-end solutions for optical, wireless, broadband and IP-or Internet protocol-networks.
“It’s a very, very big market segment we’re playing into.”
Agilent plans to play into the market by integrating its acceSS7, accessFiber and Firehunter management systems with OSI’s NETeXPERT Unified Management Architecture platform. This, the company said, will create an open, scalable solution for the operation and management of next-generation networks.
“OSI is a great fit with Agilent’s strategy and clearly positions us as the leading provider of OSS (operations-support-system) solutions for current and next-generation communications service providers,” said Ned Barnholt, Agilent’s president and chief executive officer.
John Moore, an analyst with Moody’s Investors Service, said Agilent’s actions in the past few weeks show the company is moving to position itself as the primary testing and measurement company for the telecommunications sector.
“They’re making an aggressive move into the hot areas of their industry,” he said.
Agilent’s aggressive moves include the OSI acquisition and the sale of its lagging medical division to Philips Electronics earlier this month. This, Moore said, shows Agilent is shedding its fat and aiming straight for the telecommunications industry.
Agilent’s recent moves come after positive earnings reports. The company posted a net income for the fourth quarter ended Oct. 31 of 69 cents a share, which blew past analysts’ estimates of 53 cents a share and the previous year’s earnings of 39 cents a share.
The acquisition of Objective Systems, which has about 400 employees, is expected to close in about six weeks. Agilent will purchase outstanding shares of the company for $17.75 per share. Agilent said the acquisition should add about 1 percent to its revenue growth next year.
