With the purchase of Cellular Specialties, Westell Technologies continues its diversification and expansion into the telecommunications industry. Westell, formerly known for modems and teleconferencing, added the in-building wireless design and development capability of CSI for the purchase price of $39 million.
Westell sold its Customer Networking Solutions modem division to NetGear and its teleconference subsidiary to Arkadin and changed course in 2011 as part of a corporate turnaround strategy.
“Our strategy in recent years has been to regain profitability and to refocus the company from a couple of commodity businesses to telecom,” Ben Stump, Westell chief technology officer, told AGL Link. “Westell divested itself of two of its three major product lines, keeping the outside plant product line, and started to rebuild in new growth areas.”
After shedding the divisions, Westell Technologies went on a buying spree that included Antone Wireless tower-mounted amplifiers in 2012, Kentrox intelligent site management in 2013 and now Cellular Specialties.
“We want to be in a growth space, not in a commoditized market,” Stump said. “That is a totally different business model with high volume, low margins. In a growth business, you are talking about larger initiatives, higher margins. We are trying to maintain 40-plus percent growth margins.”
Westell believes in-building DAS and small cell products complement its intelligent site management and cell-site optimization, as well as leverage its outside plant and attenuation panel product lines.
“CSI’s customer base and buying community is very similar to Westell’s,” Stump said. “We also gain some customer diversification through the acquisition.”
CSI’s product lines will become a key part of higher-value solutions, according to Stump. He sees direct synergies between the intelligent site management products and the DAS/small cell lines.
“What we do from a cell tower site monitoring perspective will translate directly to DAS monitoring,” he said. “With vendor-neutral monitoring of the DAS equipment, we will integrate the DAS information — from alarms to performance — with the support infrastructure to provide a full, overall DAS management capability.” Monitoring will also be provided for the legacy in-building equipment, monitoring repeaters and bi-directional amplifiers.
Rick Gilbert, who became president and CEO of Westell in 2009, has led the company through the changes. Gilbert set a goal of $100 million revenue run rate in Westell’s fiscal year 2014, which ends this month. The company has surpassed that number and plans to shoot for $200 million in revenue run rate in its next fiscal year.
“We need to achieve that goal through a strategic combination of organic investment and new product innovation as well as through acquisitions. It has been a great turnaround,” Stump said.
Previously, Westell’s only in-building wireless products were DAS interface panels, which provide passive attenuation between the base station and the DAS headend. With the industry moving from passive attenuation to active monitoring and management, expect Westell to keep pace with new products in this area.