DZS Sells Service Assurance and WiFi Management Software Portfolio to AXON Networks

Rhea-AI Summary

DZS has sold its Service Assurance and WiFi Management software portfolio to AXON Networks for $34 million in an all-cash transaction. The deal includes the transfer of CloudCheck, Expresse, and TruSpeed assets, IP patents, a development team, and key customers to AXON. This move allows DZS to focus on its Networking, Connectivity, and Cloud Edge portfolio, while AXON integrates these products into its Network-as-a-Service (NaaS) offerings.

The transaction expands the strategic partnership between DZS and AXON, enabling cross-selling opportunities. For AXON, this acquisition enhances its Software Defined Networking portfolio and strengthens its ability to deliver comprehensive NaaS solutions to service providers. The combined development team is expected to be one of the largest in the industry, driving innovation in network management and orchestration solutions.

Positive

• All-cash transaction of $34 million for DZS
• Strategic focus on core Networking, Connectivity, and Cloud Edge portfolio
• Expanded partnership with AXON Networks, enabling cross-selling opportunities
• Potential for future growth as broadband access industry normalizes and government stimulus programs emerge

Negative

• Divestment of Service Assurance and WiFi Management software portfolio
• Loss of skilled development team and marquee customers associated with the sold assets

Insights

Financial Analyst

The sale of DZS's Service Assurance and WiFi Management software portfolio to AXON Networks for $34 million in cash is a significant move for both companies. For DZS, with a market cap of just $15.1 million, this transaction represents a substantial cash infusion, potentially more than doubling its market value.

This deal allows DZS to streamline its focus on core Broadband Networking, Connectivity and Cloud Edge solutions, which could lead to improved operational efficiency and resource allocation. The expanded strategic partnership with AXON also opens up cross-selling opportunities, potentially boosting future revenues.

For investors, this move signals a strategic shift towards a more focused business model for DZS. The cash injection could strengthen the company's balance sheet and provide capital for investments in its core technologies. However, it's important to monitor how effectively DZS utilizes this capital and executes its narrowed strategy in the competitive broadband industry.

Tech Industry Analyst

This acquisition significantly bolsters AXON Networks' position in the Network-as-a-Service (NaaS) market. By integrating DZS's CloudCheck, Expresse and TruSpeed assets into its portfolio, AXON is poised to offer a more comprehensive NaaS platform to service providers.

The transaction also includes the transfer of intellectual property and a skilled development team, which could accelerate AXON's innovation in Software Defined Networking (SDN) and service management solutions. This move aligns with the industry trend towards more integrated, software-driven network management and orchestration solutions.

For the broader tech ecosystem, this deal highlights the growing importance of end-to-end network management solutions in the era of hybrid network architectures. It also underscores the value of software assets in the telecommunications industry, particularly those that can optimize network performance and user experience.

Transaction expands the strategic partnership between both companies and enables DZS to focus on its category-defining Broadband Networking, Connectivity and Cloud Edge portfolio

DALLAS and IRVINE, Calif., Oct. 16, 2024 (GLOBE NEWSWIRE) -- DZS (OTC: DZSI), a global leader of Networking, Connectivity and Cloud Edge software solutions and AXON Networks (AXON), a global leader of advanced Service Management and Orchestration solutions, today announced the acquisition of DZS’ Service Assurance and WiFi Management software portfolio by AXON Networks. The all-cash, $34 million transaction transfers all CloudCheck, Expresse and TruSpeed assets and IP patents to AXON, along with a highly skilled development team and long-time marquee customers. These products will be integrated into AXON’s Network-as-a-Service (NaaS) portfolio, while DZS will focus its development and go-to-market strategy on its Networking, Connectivity and Cloud Edge portfolio. Today’s transaction also represents an expansion of the strategic partnership between the two companies, enabling cross-selling opportunities.

The Service Assurance and WiFi Management solutions included in the transaction adds to AXON’s growing Software Defined Networking portfolio, enabling the company to deliver a comprehensive NaaS platform to service providers and optimize the overall quality of experience for its customers.

“We have been working with AXON for the past two years on a variety of technology advancements spanning SDN and network edge-to-home broadband solutions,” said Charlie Vogt, President and CEO, DZS. “We acquired Expresse and CloudCheck from ASSIA in 2022 to accelerate the market adoption for our networking and connectivity products through cross-selling and sales synergies, which we have achieved. The enhanced partnership and sale of our Service Assurance and WiFi Management software business will enable us to continue investing and differentiating our Networking, Connectivity and Cloud Edge solutions. AXON Networks is well-positioned to accelerate the next phase of innovation of Expresse, CloudCheck, and TruSpeed within their strong portfolio of software solutions.”

“AXON Networks is at the forefront of the telecommunications industry, driving a level of innovation that delivers unmatched network management and orchestration solutions for service providers across the globe,” said Martin Manniche, Founder and CEO of AXON Networks. “The transfer of DZS’ Service Assurance and WiFi Management software to the AXON portfolio and the addition of new engineers from the acquisition creates a combined development team that will be one of the largest and strongest of its kind. Expresse and CloudCheck engineers and customers joining AXON can rest assured that we will continue to invest in this solution portfolio, and we look forward to creating tremendous value for all our customers, employees and investors as we go forward, enabling us to continue to offer new solutions and expand both our capabilities and our global footprint.”

As the broadband access industry begins to normalize after recent challenges with supply chain driven excess inventory and as numerous broadband government-led stimulus programs begin to emerge, DZS faces an opportune window to double-down on its category-defining Networking, Connectivity and Cloud Edge solutions. The company looks forward to its expanded relationship with AXON to capitalize on these new opportunities and the power of partnership.

AXON’s mission is to enable Internet Service Providers (ISPs) to evolve from traditional service providers to providers of a total networking experience for their customers. The company does that by providing real-time orchestration solutions and access to powerful analytics data, as well as cloud-native network management and digital twin technologies. AXON is the only provider that can bring every network segment together in a hybrid network architecture, defragmenting the network and orchestrating all segments from end-to-end. The addition of the DZS assets to the AXON portfolio reflects AXON Networks’ industry leadership and financial strength as it continues to advance broadband networking technology around the world. As a result of the transaction, AXON Networks is well-positioned to address the challenge of managing end-to-end network operations for service providers through seamless and scalable solutions.

About AXON Networks

AXON Networks was created from the recognition that ISPs need to move beyond simple billing relationships with their customers to a new focus on delivering a total network experience and strengthening their relationships with the end user.

Born from Greenwave Systems - a leader in network connectivity solutions - AXON Networks is committed to helping ISPs deliver the Quality of Experience their customers demand from their broadband connectivity provider.

AXON Networks empowers global operators to offer a total software-defined, networking experience. AXON's Orchestration Platform offers a single solution for any network, any device, or any service, anywhere. Our mission is to empower global operators to transform their networks to deliver the best customer experience and service. For more information, please visit www.axon-networks.com.

About DZS

DZS (OTC: DZSI), a global leader of Networking, Connectivity and Cloud Edge software solutions is enabling broadband everywhere.

For further information see: www.DZSi.com
DZS on Twitter: https://twitter.com/dzs_innovation
DZS on LinkedIn: https://www.linkedin.com/company/DZSi/

AXON Networks Media Contact:
John O’Malley
The Guyer Group
585.261.5899
john@guyergroup.com        

DZS Media Contact:
Geoff Burke, SVP Marketing and Investor Relations
Email: IR@dzsi.com

FAQ

What assets did DZS sell to AXON Networks in the recent transaction?

DZS sold its Service Assurance and WiFi Management software portfolio, including CloudCheck, Expresse, and TruSpeed assets, IP patents, a development team, and long-time marquee customers to AXON Networks for $34 million in an all-cash transaction.

How will the sale affect DZS's (DZSI) business focus?

The sale allows DZS to focus its development and go-to-market strategy on its core Networking, Connectivity, and Cloud Edge portfolio, enabling the company to invest in and differentiate these solutions.

What are the benefits of this transaction for AXON Networks?

AXON Networks gains a comprehensive Network-as-a-Service platform, enhances its Software Defined Networking portfolio, and acquires a skilled development team. This acquisition strengthens AXON's ability to deliver end-to-end network management solutions for service providers.

How does this transaction impact the partnership between DZS (DZSI) and AXON Networks?

The transaction expands the strategic partnership between DZS and AXON Networks, enabling cross-selling opportunities and allowing both companies to capitalize on new opportunities in the broadband access industry.