DZS to Acquire Subscriber Access Technology Leader NetComm
DZS (Nasdaq: DZSI), a global leader of broadband networking and software-defined cloud solutions, today announced a binding agreement to acquire NetComm Wireless Pty Ltd. (NetComm).
The acquisition of NetComm’s Fiber Extension, Fixed Wireless Access (FWA), Home Broadband and Industrial Internet of Things (IoT) products and patents combined with DZS’ category defining broadband networking and cloud software solutions will create one of the world’s most comprehensive and technologically advanced last mile broadband access portfolios. NetComm has approximately 50 active communications service provider (CSP) and enterprise customers in the United States, Canada, Latin America, Europe, Australia and New Zealand. In addition to the substantial technology synergies, DZS will on-board the majority of the NetComm employees, of which, approximately 60% are research & development and customer care team members.
NetComm has a long history of innovation in developing differentiated broadband access technology with a focus on quality, performance and operational simplicity including self-install capabilities. The transaction is expected to close during the second quarter of 2024. Among active NetComm customers are numerous large scale CSPs such as UScellular (the fourth-largest full-service wireless carrier in the United States), Bell Canada (Canada’s largest telecom company), Vodafone (one of the world’s largest telecom operators), Telstra (Australia’s largest telecom company), Aussie Broadband (Australia’s fourth-largest ISP) and More Telecom (fast-growing Australian ISP), all of which have been previously disclosed.
“The acquisition of NetComm underscores our commitment to innovation at the network edge and further aligns with our vision and strategy of becoming the premier technology leader in broadband networking and cloud software management solutions,” said charlie Vogt, President and CEO, DZS. “While we are technology evangelists for broadband everywhere and fiber-first architectures, fixed and mobile service providers will continue to evolve their networks and leverage a variety of technologies that best fit the geography, topology, and economics of the markets they serve. With the addition of NetComm’s fiber extension, fixed wireless, WiFi 7 home broadband and industrial IOT products, the expanded DZS portfolio arguably will represent one of the most complete and technologically advanced open and standards-based broadband networking and cloud management software portfolios in the world and be uniquely aligned with the breadth of CSP needs and architectures. We are especially enthusiastic about the new team members that will be joining DZS upon completion of the transaction and the opportunity to align and earn future business with NetComm’s long-standing and loyal customers.”
NetComm, founded in 1982, is a leading broadband networking innovator in the 5G fixed wireless, home broadband, fiber-extension and IoT technology domains. NetComm Wireless traded on the Australian Stock Exchange until Casa Systems acquired the company in 2019. Under the terms of the acquisition agreement, DZS will pay $7 million at closing for NetComm, including its intellectual property and inventory. With the addition of NetComm employees, DZS is expected to have approximately 550 team members serving the Americas, EMEA, Australia and New Zealand markets. The purchase price includes an additional earn-out of up to $3 million dollars if 2024 revenue of $87.5 million is achieved with such earn-out structure beginning at $72.5 million of 2024 net revenue.
NetComm’s technology portfolio will complement DZS’ leading-edge Optical, Access, Subscriber, and Cloud Edge portfolio, enabling the company to deliver a highly differentiated broadband offering and experience designed to exceed the growing demand for “broadband everywhere.”
NetComm’s Product Portfolio:
Fiber Extension: Delivers fiber-equivalent gigabit broadband speeds leveraging Gfast technology over copper and coaxial cable
Fixed Wireless Access (FWA): Provides fiber-equivalent gigabit broadband via 4G/5G millimeter wave technology
Home Broadband: Enables WiFi 6/6E/7 in-home coverage at gigabit broadband speeds
Industrial IoT: Delivers networking connectivity leveraging 4G/5G wireless and WiFi technologies
“NetComm’s cutting-edge fixed and mobile subscriber access technologies and marquee customers spanning Australia, New Zealand, North America and Europe will bolster DZS’ broadband networking and cloud software portfolio,” said Steve Collins, CEO, NetComm. “Getting to know charlie, his team and the DZS products and customers has assured us that the combination of technology, culture, customers, suppliers and employees is an ideal fit to continue the innovation and product excellence NetComm has cultivated over the last 40 years.”
“We are pleased to continue our relationship with NetComm to ensure our home and business internet customers have fast and reliable connectivity with an easy-to-install solution,” said Eric Jagher, Senior Vice President and Chief Marketing Officer, UScellular. “We are also excited about the expertise DZS brings, and we look forward to working with them to drive further innovation and provide an even greater experience for our customers.”
“DZS has a strong commitment to delivering innovative and high-quality solutions,” said Crystal Dowds, Vice President of Architecture, Engineering and Technology, Lumen. “Their proactive approach to meeting customer needs and timelines is enhanced by their focus on the last mile and continually improving the customer experience. DZS’ dedication to innovation makes them an ideal company to acquire NetComm.”
“More Telecom has a valued and longstanding relationship with NetComm,” said Andy Branson, CEO, More Telecom. “We are excited to see this combination occur. The NetComm acquisition by DZS will strengthen our partnership, enhance technology synergies, and create additional opportunities for collaboration, especially as More Telecom continues to deliver on our commitment to offer broadband services across Australia.”
