Part of DragonWave’s road map for growth in 2011 includes “digestible mergers and acquisitions.”
when DragonWave bought Connecticut-based Axerra Networks in an all-cash transaction valued at $9.5 million.
Axerra’s technology helps speed up mobile backhaul, a field DragonWave is directly involved in as it targets 4G.
“ What Axerra does is it brings us relationships. It brings us some new products. But more important than that, it brings us some relationships with customers that we didn’t have,” Mr. Allen said.
Just like companies in the cable market, pointed out analyst Matthew Thornton, DragonWave is “picking off small companies that have complementary technologies and also complementary regional footprints.
“I think emerging acquisitions is the way forward for them; you look at Axerra, it’s complementary,” said Mr. Thornton, of Bostonbased Avian Securities.
On DragonWave’s part, “ We are always looking at possible acquisition candidates,” John Lawlor, vice-president of investor relations, wrote in an e-mail to OBJ.
But strategic acquisitions isn’t the company’s only approach. Another prong of DragonWave’s future growth, Mr. Lawlor said, is to “ broaden and deepen our direct presence in key strategic markets.”
In most cases this includes emerging markets. In 2010, DragonWave opened a sales market in Mexico City to better target Latin America, for example. It also has offices in Singapore, Dubai, and the U.K.
But North America is also a large part of the firm’s strategy – in December, DragonWave signed a deal with repeat customer Barrett Xplore. As Barrett builds out a new 4G terrestrial network in Canada’s rural north, DragonWave will power that network with two forms of its wireless backhaul technology.
And then there’s Clearwire. A few quarters back, the service provider ordered equipment from DragonWave to build out its pan-United