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Arris closes Cadant deal

Thu, 01/31/2002 - 7:00pm
Staff

Arris Group said it has acquired cable modem termination system start-up Cadant Inc., closing a deal first announced at last November's Western Cable Show. The deal combines the only two CMTS vendors so far to obtain DOCSIS 1.1-qualified status from CableLabs. Arris' 1.1-qualified Cornerstone CMTS 1500 is a "pizza box" CMTS, and Cadant's C4 is a "carrier-class" CMTS chassis. Before selling to Arris, Cadant also developed the C4c, a 2U-high compact CMTS with two CAMs (cable access modules). The dual-CAM design enables operators to combine capacity or to use one CAM as a hot standby for carrier-class services.

The deal is expected to boost sales of Cadant product. Although Cadant had secured deployments with Lawrence, Kan.-based Sunflower Broadband and Alaska's General Communications Inc., the start-up didn't have the sales and marketing infrastructure that an Arris brings to the table.

Arris is ready to deploy Cadant equipment, and plans to move more than 50 C4s with an undisclosed operator in two markets, Arris spokesman Mike Horton said.

Although no one is expecting a market turnaround before the second half of 2002, Arris expects spending in the CMTS sector, as a whole, to rise with every quarter, moving from about $80 million in the first quarter to between $140 million and $150 million in the fourth quarter.

Arris' acquisition of Cadant also closes yet another chapter in the history of CMTS start-ups, which have all but sold out to bigger competitors. Now gone are Broadband Access Systems (part of ADC Telecommunications), RiverDelta Networks (acquired by Motorola Broadband) and Pacific Broadband Communications (under the auspices of Juniper Networks).

With each deal, however, the value attached has dropped considerably. ADC's original deal in 2000 was valued at $2.25 billion. In comparison, Arris' Cadant purchase is in the $60 million range.

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