DragonWave buys Axerra for $9.5M

DragonWave Inc. (DRWI) has acquired Axerra Networks Inc. in an all-cash deal valued at $9.5 million. The purchase will add to DragonWave’s microwave product portfolio, the company said. The value of the deal could increase to $15.5 million over the next 16 months if Axerra brings in $25 million in revenue during that timeframe.
The combined product portfolio can deliver TDM and packet services over a single packet network that can operate over microwave and fiber backhaul, DragonWave said. “Axerra’s pseudowire solutions enable incumbent carriers, competitive service providers, mobile wireless operators and cable MSOs to extend IP plus legacy voice and data services in native format over IP ethernet and MPLS networks,” said DragonWave CEO Peter Allen in a conference call.
DragonWave plans to keep Axerra’s 61 employees, most of whom are in research and development, in Tel Aviv, Israel, Allen said. Axerra has about 50 customers, most of which are in North America, including a tier-one cable MSO with wireless assets. Although the company wasn’t named, it likely could be Cox Communications Inc.
Allen said the vast majority of Axerra customers have mobile operations. “When deployed in cell sites and central offices, the Axerra AXN family of transport and switching solutions enable a new era in mobile backhaul by supporting both legacy 2G/3G and next-generation 4G services over a common packet network backhaul infrastructure,” the company said in a press release.
Allen said operators with converged networks are under increased pressure to reduce operating expenses and as such, will continue to explore packet-based solutions due to the economics. “Data growth is a tricky thing,” he said.
Operators with legacy architectures looking to take advantage of packet-based backhaul solutions want to make sure the new approach doesn’t hurt their legacy operations. The fact that Axerra has a widely deployed product “is helpful in those discussions,” he said.