DZS Acquires Casa’s NetComm Business

NetComm is an Australian subsidiary of Casa Systems, which produces and sells Fixed Wireless Access (FWA) client devices, Wi Fi products, fiber optic expansion devices, and enterprise Internet of Things technology.
The proposed transaction is the final step for Casa to sell a series of business plans. According to the Chapter 11 sale procedure supervised by the court, Casa has reached an agreement to sell its cable television business to Vecima Networks for $20 million (followed by an auction), and to sell its 5G mobile core and RAN assets to Lumine Group for $32.5 million.
According to the terms of the transaction, DZS will pay $7 million to acquire NetComm (including its intellectual property and inventory) at the end of the transaction, if NetComm’s revenue in 2024 exceeds $87.5 million, plus an additional income of up to $3 million (totaling $10 million). The incremental profitability structure starts with a net income of $72.5 million in 2024.
This transaction is expected to be completed by the end of May. It is expected that approximately 100 NetComm employees will join DZS, bringing the total number of DZS employees to around 550.
Casa acquired NetComm for $115 million in 2019.

Charlie Vogt, President and CEO of DZS, believes that the acquisition of NetComm will effectively enhance his company’s wired and wireless access product portfolio, building on DZS’s traditional product portfolio and previous acquisitions of Optelian (optical technology), Assia (home Wi Fi management), and Rift (cloud automation).
In addition to providing authorized and unauthorized spectrum FWA products, NetComm also has a range of Wi Fi 6E and Wi Fi 7 products primarily sold in Australia and New Zealand, as well as an industrial IoT product portfolio that supports 4G, 5G, and Wi Fi.
NetComm’s fiber optic extension service centers around Distribution Point Units (DPUs) using G.fast technology, providing gigabit speed copper cables to single or multi household residential units (MDUs) through fiber to road architecture.
Vogt stated that NetComm has made some “meaningful” fiber optic expansion deployments with some large Tier-2 service operators in Canada and the United States, and has deployed significant DSL opportunities in markets such as the UK, Germany, and Israel.

Vogt stated that NetComm “truly completed our last mile access combination.”.
DZS has no plans to add hybrid fiber/coaxial cable (HFC) technology to its access network product portfolio.
Vogt said, “I believe that CMTS (cable modem terminal systems) and HFC factories will gradually be replaced by PON.”
Vogt stated that there is almost no overlap between DZS’s traditional business and NetComm’s business. He estimates that out of the 320 active customers of DZS, only 5 overlap with NetComm’s customer base.
NetComm has approximately 50 active service providers and corporate clients in the United States, Canada, Latin America, Europe, Australia, and New Zealand. Some of NetComm’s larger existing customers include UScelllar, Bell Canada, Telstra, More Telecom, and Vodafone.
Vogt said, “From the perspective of technology, customers, scale, revenue and profitability, as well as the synergies of cross selling, we believe that the acquisition of NetComm is transformative.”