FiberGeneration

It's About the Test & Measurement Industry

In a recent post, I mentionned  a handful of  test & measurement players, silencing numerous companies. The reason is pretty simple : IMHO, Agilent Technologies, Danaher's Fluke+Tektronix, Anritsu, and JDSU are the only companies aimed to survive the forthcoming T&M industry shake-up. We are the verge of a new booming era in the Telecommunications, thanks to the enormous demand for bandwidth worldwide. Hence the mandatory consolidation in some sectors, Test & Measurement being one of the most vibrant.
That's why my take is, lots of the small guys will disappear one way or another. Mergers, acquisitions, banckruptcies, the whole range of possible futures is wide open for the EXFOs, the Spirents, the Ixias, and the one small firm somewhere down the Silicon Valley which I can't mention anymore (hint : they have a very very little useless subsidiary nearby the Leman lake, and their name is the opposite of the moon going dawn). Even the Yokogawas will face the big question someday...
In 10 years from now, I see only three survivors out of the Four-Tops above : Agilent, Danaher, and Anritsu. Don't ask me why : just a bit more than a feeling, from a 25-years presence in this industry. It has to do with their history, legacy, and roots, somehow.

Nevertheless, there is one thing I can tell : I'll do my very best to play a pro-active part in this shake-up, thru the Testing 2.0 adventure. See you in 10 years !

Test & Measurement Industry : The Consolidation Still Goes On

According to Lightwave earlier this week, Danaher Corp. and Tektronix Inc. announced they have reached a definitive agreement under which Danaher will make a cash tender offer to acquire all outstanding common shares of Tektronix for $38.00 per share. The aggregate purchase price is approximately $2.8 billion, including debt, transaction costs, and net of cash acquired.

With the acquisition of a venerable company, Tektronix, which is a reference in the T&M Test & Measurement world  together with Agilent Technologies (formerly Hewlett-Packard), the industry landscape is going to change once again. The alliance between Fluke - another pretty strong reference at every Telecoms & Datacoms network installer on the Planet - and Tek is creating a new  one-stop-shopping center covering the whole spectrum of typical applications, from lab & manufacturing (Tek) to installation & maintenance (Fluke), from low-end/high quality/mainstream test gear (Fluke) to high-end/high quality/advanced (Tektronix).

Whilst T&M market leader Agilent Technologies  has to face three major competitors : JDSU, Anritsu, and the new Fluke+Tek actor now, the French-Canadian firm EXFO is left alone as a small player in front of giants. EXFO, whose role model was HP Test & Measurement (aka Agilent) will most probably be set ready for a merger with another group.

   

Note that EXFO's stock slipped quite heavily yesterday, and that Tek's raised rose nicely at the official announcement.
Charts available at Yahoo!Finance here.

post-scriptum : For you who are not familiar with the Telecoms Test & Measurement, I'll publish a brief history of the sector, to show how the T&M folks are still surfing on the ripples of the Internet Bubble' implosion.