Nokia Corp. NOK has entered into a definitive agreement to acquire Deepfield, a specialist in real-time analytics for IP network performance management and security. The deal is likely to close in the first quarter of 2017, subject to customary regulatory approval. However, the financial terms of the deal has not been closed yet.
The acquisition of Deepfield will significantly enhance Nokia’s analytics-driven network and service automation capabilities. Deepfield’s most valued product is its Internet Genome technology, which can identify over 30,000 popular cloud applications and services, along with tracking traffic runs to and through networks to reach subscribers, in real time. Nokia aims to integrate Deepfield’s big data analytics capabilities with its dynamic control capabilities of open software defined network platforms.
Nokia’s network infrastructure is primarily centred on telecom operators. Consequently, Nokia Networks acquisition of its rival company Alcatel-Lucent for $17.4 billion last year has transformed it into a formidable player in the global telecom infrastructure market.
The buyout of the wireless business of Alcatel-Lucent has significantly strengthened Nokia’s foothold in North America. Leading U.S. telecom operators, namely, AT&T Inc. T and Verizon Communications Inc. VZ are prominent customers of Alcatel-Lucent. Additionally, Alcatel-Lucent has a strong presence in China while Nokia enjoys considerable dominance in Europe and Asia.
Importantly, Alcatel-Lucent has lucrative assets to support the enterprise segment, which Nokia intends to capitalize on to get a strong foothold in the sector already dominated by large network infrastructure solution providers like Cisco Systems Inc. CSCO and Huawei Technologies Co. Ltd.
The merged entity can effectively capitalize on the emerging Internet-of-Things (IoT) platform and offer competent triple-play voice, video and data solutions worldwide. The core focus areas will be next-generation 5G wireless technology, IP and software defined networking, cloud-based solutions, big data analytics, and sensors and imaging.
Price Performance of Nokia
So far, 2016 has turned out to be a pathetic one for Nokia. Year to date, the stock price of the company plunged a substantial 32.76% underperforming the Zacks categorized Wireless Equipment industry, which has witnessed a decline of 6.30% in the same time frame.
Nevertheless, Nokia is restructuring its wireless infrastructure gear making wings to capitalize on upcoming 5G network, IoT and lucrative enterprise solutions business. These factors are the primary reason behind the stock currently carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
CISCO SYSTEMS (CSCO): Free Stock Analysis Report
NOKIA CP-ADR A (NOK): Free Stock Analysis Report
AT&T INC (T): Free Stock Analysis Report
VERIZON COMM (VZ): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research