Clearfield, Inc. (“Clearfield”) (NASDAQ:
CLFD), the specialist in fiber management and connectivity
platforms for communication service providers, has entered into a
definitive agreement to acquire Finnish company Nestor Cables Oy
(“Nestor”), a leading developer and manufacturer of fiber optic
cable solutions. The pending acquisition follows a long-standing,
synergistic relationship between Clearfield and Nestor, who have
worked together for over a decade. The acquisition is expected to
be accretive to Clearfield earnings.
Nestor Overview Nestor was founded in 2007 in
Oulu, Finland, by cable technology professionals. Its product
portfolio includes fiber optic cables, connectivity accessories for
fiber optic networks and instrumentation, and the Nestor Optimus
product family for microduct networks. Nestor offers its customers
complete solutions for fiber optic networks, including fiber to the
home (FTTH) and fiber to the premises (FTTP) applications.
Nestor has a strong market position in Finland as a supplier of
optical fiber cabling. The company also exports many of its
products to the European continent, accounting for approximately
30% of its annual revenues. Nestor operates two production
facilities and has customers in more than 50 countries.
Strategic RationaleSince 2012, Nestor has
supplied fiber optic cables for Clearfield’s high-quality
FieldShield product line. This strategic acquisition will enable
Clearfield to vertically integrate the supply of its fiber optic
cables to meet future customer demand. Furthermore, Clearfield
anticipates leveraging the deep technical expertise of the Nestor
team, who have decades of optical experience, to extend the
available supply of FieldShield fiber into the North American
market. Clearfield expects to open optical fiber production in its
Mexico facility and begin production of optical cable in North
America in early calendar year 2023.
Concurrently, Nestor will continue to service all of its
existing customers throughout Finland and other European countries.
Clearfield is excited to bring its fiber management solutions to
Nestor’s customers and prospects in the European market. In 2021,
Nestor generated EUR €31.7 million in revenue under Finnish
Accounting Standards.
Acquisition SummaryThe value of the transaction
including fees is approximately US $23 million. Clearfield expects
to fund the acquisition through its credit facility. The
transaction is expected to close in a few months and is subject to
customary Finnish regulatory approvals. Upon close of the
transaction, Nestor will be operated as a subsidiary of
Clearfield.
Additional details regarding the transaction can be found in the
Company’s Current Report on Form 8-K, filed today and available in
the Investor Relations section of Clearfield’s website here.
Management Commentary“The acquisition of Nestor
is a significant milestone for Clearfield,” said Company President
and CEO Cheri Beranek. “Nestor has been a wonderful company to work
with over the last 10 years, and we are thrilled to be adding them
to our team. Nestor’s focus on providing its customers with
reliable and flexible deliveries, quick reaction times, and
operational efficiency is entirely aligned with Clearfield’s
company culture. Moreover, Nestor employees have deep expertise in
fiber optical development and manufacturing, with many employees
who gained their skills with the production of optical cable by
Nokia years ago. We are excited for the potential opportunities
afforded by this acquisition, namely the ability to leverage their
fiber optic cable expertise in our own manufacturing facility in
Mexico and, in the longer term, evaluate the opportunity to enter
the European market with our fiber management solutions.”
Jarmo Rajala, President and CEO of Nestor, added: “Clearfield
has been a fantastic partner to Nestor Cables for many years. As a
true leader in the growing Community Broadband space, we are
delighted to join Clearfield at this pivotal moment for the fiber
broadband industry. We look forward to supporting the expansion of
FieldShield fiber availability in North America as the demand for
fiber continues to grow exponentially.”
Transaction AdvisorsNeedham & Co. is acting
as financial advisor to Clearfield. Ballard Spahr LLP is acting as
U.S. legal advisor and Avance Asianajotoimisto Oy is acting as
Finnish legal advisor to Clearfield.
Teknoventure Oy is acting as financial advisor to shareholders
of Nestor Cables Oy, and JV Lakiasiat Oy is acting as legal advisor
to Nestor Cables Oy.
Conference CallClearfield management will hold
a conference call today (May 17, 2022) at 8:30 a.m. Eastern Time
(7:30 a.m. Central Time) to discuss the proposed acquisition of
Nestor Cables Oy.
Clearfield’s President and CEO Cheri Beranek and CFO Dan Herzog
will host the call, followed by a question-and-answer period.
U.S. dial-in: 1-877-407-0792International dial-in:
1-201-689-8263Conference ID: 13730071
The conference call will be webcast live and available for
replay here.
Please call the conference telephone number 10 minutes prior to
the start time. An operator will register your name and
organization. If you have any difficulty connecting with the
conference call, please contact Gateway Investor Relations at
1-949-574-3860.
A replay of the call will be available after 11:30 a.m. Eastern
time on the same day through May 31, 2022.
U.S. replay dial-in: 1-844-512-2921International replay dial-in:
1-412-317-6671Replay ID: 13730071
About Clearfield, Inc. Clearfield, Inc.
(NASDAQ: CLFD) designs, manufactures, and distributes fiber optic
management, protection, and delivery products for communications
networks. Our “fiber to anywhere” platform serves the unique
requirements of leading incumbent local exchange carriers
(traditional carriers), competitive local exchange carriers
(alternative carriers), and MSO/cable TV companies, while also
catering to the broadband needs of the utility/municipality,
enterprise, data center and military markets. Headquartered in
Minneapolis, MN, Clearfield deploys more than a million fiber ports
each year. For more information, visit www.SeeClearfield.com.
Cautionary Statement Regarding Forward-Looking
Information Forward-looking statements contained herein
and in any related presentation are made pursuant to the safe
harbor provisions of the Private Litigation Reform Act of 1995.
Words such as “may,” “will,” “expect,” “believe,” “anticipate,”
“estimate,” “outlook,” or “continue” or comparable terminology are
intended to identify forward-looking statements. These statements
are based on Clearfield’s current expectations or beliefs and are
subject to uncertainty and changes in circumstances. There can be
no guarantee that the proposed acquisition of Nestor Cables will be
completed, that it will be completed as currently proposed, or at
any particular time. Further there can be no assurance that
Clearfield will realize the expected strategic benefits from the
transaction. Actual results may vary materially from those
expressed or implied by any forward-looking statements here due to
changes in economic, business, competitive or regulatory factors,
and other risks and uncertainties affecting the operation of
Clearfield’s business. These risks, uncertainties and contingencies
are presented in the Company’s Annual Report on Form 10-K and its
subsequent filings on Form 10-Q provides descriptions of those
risks and, from time to time, in the Company’s other filings with
the Securities and Exchange Commission. The Company undertakes no
obligation to update these statements to reflect actual events
unless required by law.
Investor Relations Contact:Matt Glover
and Sophie PearsonGateway Group, Inc.
1-949-574-3860CLFD@gatewayir.com
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