RDL:CC - Aviat's Acquisition Of Redline Is A Positive For The Bottom Line
- Aviat Networks has made a proposal to acquire Redline Communications, a Canadian wireless company that specializes in virtual fiber.
- The acquisition not only provides the U.S. company with an end-to-end solution in a rapidly growing industry but is also accretive to its gross margins.
- There is more in terms of marketing and cost synergies after the deal gets done by August and the management executes.
- On the other hand, there could be short-term pains when third-quarter financial results are announced on May 4 due to supply chain concerns and higher inflation.
- Over the longer term, Aviat is a buy and can deliver a potential upside of 18% based on its lower valuations.
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Aviat's Acquisition Of Redline Is A Positive For The Bottom Line