Tuesday, November 4, 2008

Broadband platform developer Pannaway sold to Enablence Technologies

By Mass High Tech Staff

Portsmouth, N.H.-based Pannaway Technologies Inc., a maker of converged Internet Protocol broadband access platforms, has agreed to be acquired by Canada-based Enablence Technologies Inc.

Under terms of the agreement, Enablence will issue 25,750,000 common shares of its stock in exchange for all the outstanding shares of Pannaway, as well as issue a $3 million convertible note. Based on Enablence’s closing price of 28 cents per share yesterday, the deal could be valued at more than $10 million.

As a result of the deal, Enablence will merge Pannaway with its FTTx Networks Division to focus on access technologies surrounding the “Ethernet/IP and FTTx evolution,” according to a Pannaway statement. The combined unit will boast 450 customers.

The merger is expected to result in the FTTx Division of Enablence reaching positive cash flow in fiscal year 2010, and expanding its reach to include existing DSL-based services seeking to move to optical access, according to a statement from Arvind Chhatbar, CEO of Enablence.

Sources would not disclose how the merger would affect local employees, but a statement from Enablence said the operations of the two companies “will be streamlined to help achieve cost savings and move toward profitability.” According to company representatives, Pannaway employs 80 people locally and 40 in its Texas office.

Founded in 2002, Pannaway has raised more than $66 million in private funding from a syndicate of more than 30 individual investors, including Cabletron Systems Inc. co-founders Robert Levine and former New Hampshire Gov. Craig Benson, as well as Allen Bildner, a board member of the Yankees Entertainment & Sports Network LLC (YES Network).