Exfo Electro-Optical Engineering has completed its acquisition of the assets of Consultronics, a supplier of test equipment for copper-based broadband access networks
In January 2006, Exfo signed an agreement to purchase substantially all the assets of Consultronics in an all-cash transaction based on the carrying value of the assets on the closing date of the acquisition.
Consideration paid amounts to approximately C$22.8 million (US$19.8 million), including debt assumption and other acquisition-related costs.
Consultronics, a privately held company based in Toronto with operations in the United Kingdom and Hungary, specialises in x-Digital Subscriber Line (xDSL), internet protocol TV (IPTV) and voice-over-internet protocol (VoIP) test systems for the broadband access market.
The transaction is expected to be neutral for the remainder of fiscal 2006 and accretive in fiscal 2007.
This forecast takes into account approximately US$2.0million, or US$0.03 per diluted share, annually in additional amortization of intangible assets.
"The closing was scheduled to occur before mid-March, so I'm pleased that both teams worked together remarkably well to accelerate the process and create a solid integration plan that leverages sales and product synergies," said Germain Lamonde, Exfo's chairman, president and CEO.
To account for Consultronics's results of operations with about one month left in the second quarter of fiscal 2006, Exfo has raised its sales guidance by US$1.0 million to a range between US$27.0 and US$30.0 million for the quarter ending 28 February 2006.
Gaap net earnings/loss guidance remains unchanged between a net loss of US$0.01 per diluted share and net earnings of US$0.02 per diluted share, given the anticipated neutral impact of the acquisition on the remainder of fiscal 2006.
Corporate metrics for fiscal 2006, reflecting the contribution from Consultronics and financial performance at the mid-point of the fiscal year, will be updated following the end of the second quarter.
