MRV Communications (NASDAQ: MRVC) has officially left the network integration business, having closed its previously announced sale of its Rome-based Tecnonet SpA subsidiary to Maticmind S.p.A. The Italian company paid €19.7 million (approximately $21.5 million) in cash for Tecnonet.
The payment included €15.6 million in cash from Maticmind as well as €4.1 million Tecnonet paid to its former parent prior to closing to repay an intercompany obligation. This latter payment was made possible when Tecnonet incurred third party debt, which Maticmind assumed at the deal's closing. Within 60 days of that close, an adjustment period will begin, based on changes in cash and debt of Tecnonet, as provided for in the purchase agreement.
MRV announced the agreement with Maticmind this past August (see "MRV agrees to sell Tecnonet SpA"). It followed a decision by MRV management in 2012 to streamline its operations and focus on its optical transport hardware business (see "MRV to divest network integration business, focus on optical communications").
"We are pleased to have achieved the sale of the Network Integration business both for the value received and as it allows us to focus all of our energy on the Network Equipment business and support of our vision as an end-to-end packet and optical networking solutions provider," stated MRV President and CEO Mark Bonney. "The Network Equipment business has higher gross margins and greater potential than the Network Integration business had."
Concluded Bonney, "While we have experienced and continue to see challenging conditions in the equipment market, we are confident that with a stronger balance sheet, an enhanced product line and our differentiated end-to-end packet and optical solutions, we are better positioned to serve our customers and make a more significant impact on this dynamic market."
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