Alcatel-Lucent's Sale on Heels of Acquisition

                Alcatel-Lucent's Sale on Heels of Acquisition

  PR Newswire

  NEW YORK, January 17, 2013

NEW YORK, January 17, 2013 /PRNewswire/ --

After acquiring wavelength-selective switch (WSS) developer Capella Photonics,
Alcatel-Lucent is looking into selling one of its businesses to inject cash
into the conglomerate.

The recently concluded 2013 Consumer Electronics Show featured
Alcatel-Lucent's (NYSE: ALU) [ Full Research Report ] ^(1) Connect Program, a
collection of 12 cloud-based multi-platform service concepts aimed towards new
innovation, highlights of which included interactive digital signage for
public places and retail shopping. Although this new outlook contributed to
the recent upgraded rating by Goldman Sachs, Alcatel is still in dire need of
a cash infusion.

Extending the Deadline

Despite their recent acquisition of privately-held wavelength-selective switch
(WSS) developer Capella Intelligent Subsystems Inc., one of the few
independent vendors of WSS subsystems for reconfigurable optical add/drop
multiplexers in the optical communications market, Alcatel is still on the
looking for its holy grail. Alcatel says the acquisition was "strategic to our
business" and was "not considered material."

Analysts aren't sure of Alcatel's fate in 2013, according to a report from
Daily Finance. The target share price is in fact below 15% of where the stock
is trading right now, suggesting tough times will continue for the
telecommunications equipment company even if they reduce their losses this

Some debt refinancing from a credit facility from Credit Suisse and Goldman
Sachs helped buy Alcatel enough time to get in better shape, which is the
cause of optimism coming into this year. However, the real challenge is to
overcome weak capital spending by its customers and keep up with competition
from other industry players, in order to establish a strategic vision for the
future, the report said.

Shopping for a Buyer

A report from International Business Times suggests that the number of
companies have shown interest in Alcatel's submarine cable business, which
could be a solution for the company's financial woes.

The business is proven to be profitable for them, having double digit margins
and a 40 percent market share, as told to Bloomberg. Interested companies
include investment funds Permira Advisers and PAI Partners, French sovereign
fund FSI, and France Telecom. The sale is estimated to generate as much as 800
million euros or $1.1 billion for Alcatel.

The unit is part of the company's optics-equipment business, and sales at the
optics unit fell 18 percent in the third quarter to only 480 million euros. In
comparison, Alcatel's total revenue fell by only 2.8 percent in that period.
Meanwhile, another Alcatel unit is also seen to be put up for sale, focused on
selling telecommunications equipment to businesses, valued at 200 million

Reference Links:

^(1) ^ The Full Research Report on Alcatel-Lucent - including full detailed
breakdown, analyst ratings and price targets - is available to download free
of charge at:

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