Viavi acquires broadband test vendor Trilithic

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Test instrumentation specialist Viavi Solutions has snapped up Trilithic, a provider of broadband test equipment, for an undisclosed sum.

A privately held company based in Indianapolis, Trilithic has products in two main areas: broadband instruments for installation and troubleshooting inside the home, and emergency alert systems that allow service providers to transmit public alerts and warnings across any kind of network. The company is profitable with revenues in the mid $20-million range, according to Viavi.

“Their portfolio nicely compliments Viavi’s products and enhances our ability to gain share outside of North America,” said Oleg Khaykin, president and CEO of Viavi.

While Viavi’s core business is based around sophisticated instruments sold to network equipment manufacturers and telecom operators, Trilithic focuses on tools for contractors who are maintaining and troubleshooting home networks.

“We had a hole in our portfolio in addressing the contractor space. With Trilithic we are closing that gap and we are now going to go and take share in Latin America, Europe, and Asia in these markets where we have not played before. And that's actually a very nice growing segment,” Khaykin said.

He also noted that Trilithic has technologies of interest to Viavi, such as leakage detection in cable network infrastructure, which is “becoming a major problem for a lot of cable operators as they boost the speeds and they add more services”. Viavi plans to integrate this technology into its products to create further differentiation.

The purchase, which concluded on 9 August, was disclosed during Viavi’s earnings call.

For the fourth quarter of fiscal 2017, Viavi reported revenue of $198.1 million, down 11.6 per cent year-over-year. As restructuring plans start to take effect, Viavi also managed to reduce operating expenses by $17.2 million or 15.4 per cent year-over-year.

This led to an operating margin of 15 per cent – a record high operating margin since the inception of Viavi despite the lower revenue, according to CFO Amar Maletira.

For the full year, Viavi's revenue of $811.4 million was 10.5 per cent lower compared to 2016, though net income of 94.1 million grew 4.6 per cent from the year-ago levels.

“Fiscal 2017 was my first full year as the CEO at Viavi,” said Khaykin. “I am pleased with the many transformational changes we’ve initiated and the progress to date.  My team has completed a focused restructuring of the software business, and the company has begun a necessary industry consolidation by acquiring broadband test instrument vendor Trilithic.”

Viavi also noted that it has now sold all of its shares in Lumentum, received from the spin-out (see Divide and conquer: JDSU to split into Viavi and Lumentum).

 

The Autumn 2017 issue of Fibre Systems magazine features an exclusive interview with Oleg Khaykin, president and CEO of Viavi Solutions. Subscribe now to receive your copy.

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