DZS completes divestiture of Asia business

DZS completed the divesture of its Asia business to DASAN Networks, enabling the company to focus its go-to-market strategy, technology and innovation on the Americas, Europe, Middle East and Africa, and Australia/New Zealand regions. The transaction eliminates ~$43M of debt, reducing the total long-term debt to $15M. On Jan. 5, 2024, DZS signed a definitive agreement to sell its Asia operations to DNI, for $48M. In addition to focusing on growth regions spanning the Americas, EMEA and ANZ, the divestiture aligns with the vision, strategy and growth pillars DZS has been pursuing for the past three years, specifically: Fiber broadband investment cycle fueled by over $100B in government stimulus funds; Growth spanning North America, Europe and the Middle East; Geopolitical security related cap-and-grow opportunities; Software-defined networking; 5G mobile transport adoption. The new focus on AEMEA and ANZ regions strategically aligns with the technology and acquisition investments DZS has made over the past several years, specifically the company’s market-leading Velocity access edge optical line terminal portfolio; award-winning Saber optical edge dense wavelength-division multiplexing and reconfigurable optical add-drop multiplexer platform resulting from its Optelian acquisition; and its advanced AI-driven orchestration, automation, slicing, network assurance and WiFi management software portfolio resulting from the company’s acquisitions of RIFT and ASSIA software and R&D assets, respectively. It also corresponds with the global regions where billions of dollars in government stimulus programs aimed at enhancing and building next generation fiber networks are either underway or rapidly ramping. With the sale of the Asia business, DZS is expected to be better positioned to achieve higher blended margins, and with a higher percentage of its total revenue resulting from recurring and reoccurring licenses related to its software-centric solutions. DZS believes that service providers are deemphasizing closed, proprietary and high security-risk solutions and are increasingly adopting open, standards-based, software-defined solutions. As next-generation fiber broadband and 5G deployments proliferate, DZS solutions, including its Build America, Buy America ready Velocity OLT, Helix ONT and Saber Optical transport solutions, complemented by its AI-driven cloud native software solutions, are well-suited to cost-effectively evolve CSP networks.