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MRV completes sale of network integration subsidiary Tecnonet in Italy for Euro 19.7m
Announced Date: 12/7/2015 Published Date: 12/9/2015

MRV Communications, a supplier of optical networking equipment and services, announced it has closed the sale of Tecnonet, its Network Integration subsidiary based in Rome, Italy, to Milan-based Maticmind for an initial total consideration of Euro 19.7 million (approximately $21.5 million).

MRV announced in August that it had entered into an agreement to sell the Tecnonet subsidiary based in Rome to Maticmind for Euro 19.7 million.

The company stated that the consideration from Maticmind included a cash payment of Euro 15.6 million received at closing, plus cash payments made by Tecnonet to MRV, prior to closing totalling Euro 4.1 million in repayment of an inter-company obligation. The repayment was facilitated by third party debt acquired by Tecnonet and assumed at closing by Maticmind.

Within 60 days of closing, a post-closing adjustment will commence, based on changes in cash and debt of Tecnonet, as provided for under the terms of the original purchase agreement.

In November, MRV reported third quarter revenue of $37.3 million, down 13.7% versus $43.2 million in the 2014 third quarter. The company's Network Equipment division reported sales of $22.9 million, up 4.5% compared with $21.9 million in the prior year third quarter. MRV reported a third quarter net income of $886,000, compared with a net loss of $1.04 million in the 2014 third quarter.

MRV is headquartered in Chatswoth, California and has additional marketing, research and development facilities near Boston in the U.S. and in Israel.

Regarding the transaction, MRV president and CEO Mark Bonney commented:

  • "The sale of the Network Integration business… allows MRV to focus its energy on the Network Equipment business and support its vision as an end-to-end packet and optical networking solutions provide".

  • "While MRV has experienced and continues to see challenging conditions in the equipment market, I am confident that with a stronger balance sheet, an enhanced product line and differentiated end-to-end packet and optical solutions the company is better positioned to serve its customers".