The acquisition links Bowthorpe's existing wide area network testing business with Netcom's local area network and Internet protocol network testing operation. The combined business will give Bowthorpe about 15 per cent of the pounds 1bn network testing market compared with the 40 per cent share held by a unit of Hewlett Packard, the computer equipment maker.
Rapid expansion in wireless, satellite and fixed-line data networks to service mushrooming demand has meant a mini-boom for companies that diagnose network performance and provide trouble shooting support. "This really completes the coverage we can offer major telecoms companies around the world," said Nick Brookes, Bowthorpe chief executive. "We get a lot of revenue synergies. Netcom really fits very well," he said.
Funded from an existing pounds 440m debt facility, the acquisition will be earnings neutral this year, but boost earnings per share in the first half of 2000. Telecoms networking testing is expected to contribute half Bowthorpe's earnings in 1999, up from 43 per cent a year ago to a pre- tax profit of pounds 92.1m.
Based at Calabassas in southern California, Netcommade operating profit of $32.3m on revenue of $73.5m in 1998.