Calix rises on news of deal with Ericsson
NEW YORK (AP) — Calix's stock jumped more than 11 percent Thursday, thanks to a deal the broadband equipment company struck to buy the fiber access assets of Swedish wireless equipment maker Ericsson.
THE SPARK: Calix announced Wednesday that it also signed a global reseller agreement with Ericsson, making it Ericsson's preferred global partner for broadband access applications.
Financial terms were not disclosed.
The deal is expected to close in the fourth quarter.
THE ANALYSIS: George Notter of Jefferies believes this is a good transaction for Calix.
"At face value, we like this deal as it jumpstarts Calix's international strategy in a thoughtful, low-risk way," he wrote in a note to clients.
Notter reaffirmed a "Buy" rating a $7 price target for the Petaluma, Calif., company.
SHARE ACTION: Shares of Calix Inc. gained 62 cents, or 11.7 percent, to $5.91 in afternoon trading. The stock has traded in a 52-week range of $4.25 to $15.12. It is down 21 percent for the year to date.