Viavi Acquires Trilithic (& New Markets)

With its recently finalized acquisition of electronic test and measurement equipment maker Trilithic, Viavi Solutions is expanding its technology offerings to a greater array of cable operators around the world.

Viavi unveiled the fait accompli during its recent fourth-quarter earnings call, announcing privately held Trilithic will become part of Viavi's Network Enablement (NE) group. In fiscal year 2017, that division represented 54.7% of Viavi's net revenue, or $444 million of a total $811.4 million non-GAAP. Terms of the deal, which closed Aug. 9, were not disclosed.

"Trilithic is based in Indianapolis and has been selling broadband instruments for over 30 years. Their portfolio nicely compliments Viavi's products and enhances our ability to gain share outside of North America," said Viavi CEO Oleg Khaykin, during the earnings call. (Read the entire transcript on Seeking Alpha.)

Trilithic's broadband products target cable, telecom and wireless service providers and include Ethernet, IP and wireless testers; monitoring and maintenance for troubleshooting; handheld spectrum field analyzers; hardware and cloud-based systems to supplement in-field solutions, plus leakage management and leak detection offerings.

Viavi primarily addresses a different end of the communications testing market, Khaykin said. As a result, the acquisition expands Viavi's opportunity to resolve the broad range of operators' monitoring and testing needs, he added.

"If you look at Viavi products, we are all the bells and whistles -- highly complex instruments that are used by network techs and things like that," Khaykin said. "They chose to focus more on the home market, which is the installers and people who connect. So, their products are more point-solution products whereas ours are highly programmable, highly sophisticated equipment."

In addition to addressing contractors, Trilithic successfully targeted regions including Latin America, Europe and Asia, markets in which Viavi "has not played before," he added. And Trilithic customers include multi-dwelling units (MDUs), Khaykin said, opening up that expansive opportunity to Viavi.

Finally, Viavi had not previously operated in the growing leakage detection segment, he said.

Leakage detection "is becoming a major problem for a lot of cable operators as they boost the speeds and they add more services. All the noise that gets into network from various parts of the network is causing a lot of interference, and the ability to detect the leakage and solve the problem is becoming very big," he said.

Competition for the combined Viavi and Trilithic includes Exfo, Fluke, Ixia and Spirent.

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— Alison Diana, Editor, UBB2020. Follow us on Twitter @UBB2020 or @alisoncdiana.