Allot Communications to Acquire Ortiva Wireless

Allot Communications to Acquire Ortiva Wireless

Business news |
By eeNews Europe

This transaction will enable Allot to further enhance its industry-leading Allot Service Gateway by integrating a leading-edge mobile video optimization solution into a single network intelligence platform or offering it as a standalone solution. The incorporation of Ortiva’s technology within Allot Service Gateway will allow mobile service providers to effectively manage the ever-increasing volume of video traffic on their networks, which according to Allot’s latest Global MobileTrends report, now represents 42% of mobile data traffic worldwide.

Ortiva’s solution allows service providers to dramatically improve the quality and efficiency of rich media content delivery by optimizing for real-time network conditions and for each mobile connection. This unique dual optimization capability enables the highest quality of experience for video consumers especially in fluctuating and constrained network conditions. Ortiva’s solution has been deployed at two Tier 1 mobile service providers to date.

"This acquisition is an important building block in our Service Gateway vision," commented Rami Hadar, Allot’s President and CEO. "Since the introduction of Allot Service Gateway in 2007, our goal has been to leverage our unique technology to enable the broadest range of cost-saving and revenue-generating services on a single intelligent network services platform. By purchasing Ortiva, we will own an innovative video optimization solution, one of the major value-adds that our customers are seeking today. As video becomes an ever-increasing challenge for mobile networks, this acquisition will allow Allot to offer a robust and tightly integrated video optimization service within Allot Service Gateway. We look forward to welcoming Ortiva’s talented team into our company."

The terms of the acquisition were not disclosed. The acquisition is subject to the satisfaction of certain closing conditions, and is expected to close during the second quarter of 2012. On a non-GAAP basis, management currently anticipates the following:

  • The acquisition will be accretive on a quarterly basis by the end of 2012;
  • Ortiva will contribute between $3-5 million in revenues for the second half of 2012, with a gross margin profile similar to Allot’s current level;
  • Operating expenses are currently estimated at approximately $2.5 million per quarter for the second half of 2012.

Non-GAAP financial measures exclude stock-based compensation expenses and amortization of acquired intangible assets, and add back the fair value of acquired deferred revenue written-off for GAAP purposes as part of purchase accounting.

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