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March 21, 2011

NETGEAR Signs Agreement to Acquire CNS Business of Westell Technologies

By Rajani Baburajan, TMCnet Contributor

NETGEAR, a networking company selling products and solutions to consumers, businesses and service providers, announced its agreement to acquire the assets of the Customer Networking Solutions (CNS) division of Westell Technologies, for $33.5 million.  

Westell designs carrier-class equipment that delivers high-speed communications for telecommunications operators and Internet service providers throughout North America and Europe.

NETGEAR will pay $33.5 million in cash out of existing reserves for the CNS division. The CNS division is a provider of carrier class broadband networking products to U.S. telecom service providers. Westell’s CNS family of products enables high-speed transport and networking of voice, data, video and other services over existing copper and fiber infrastructures.  

The CNS business, which will be acquired by NETGEAR, generated approximately $39.5 million in net revenue for Westell in 2010. The transaction will not have an adverse impact on NETGEAR’s overall company operating margins, according to company sources.

“This transaction will position NETGEAR as a leader in the U.S. telecommunications service provider home network equipment market,” said Patrick Lo, chairman and CEO of NETGEAR, in a statement.  “The addition of the CNS customer base that we are acquiring will allow us to accelerate our service provider revenue growth and strengthen our market position among North America telecom operators.”

NETGEAR is acquiring a select team of Westell employees, including the CNS sales and marketing team, most of its customer base, its core CNS product and test engineering teams, nineteen patents and pending patent applications, proprietary technologies, current products, and products in development.

Westell will retain certain customer relationships as well as its HomeCloud product line.

“NETGEAR will give our CNS division a solid platform for growth, as well as the additional opportunities and resources that come from being part of a large global organization focused solely on customer broadband networking products,” said Rick Gilbert, chairman and CEO of Westell.

Recently, NETGEAR announced the launch of four new products for mobile network operators. These new mobile broadband routers are designed to improve the overall experience of the broadband users. 

Rajani Baburajan is a contributing editor for TMCnet. To read more of Rajani's articles, please visit her columnist page.

Edited by Jennifer Russell

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