So, after months of speculation, it really is the end of the road for CoSine Communications Inc. (Nasdaq: COSN), which was acquired by Tut Systems Inc. (Nasdaq: TUTS) for $24.1 million on Friday night (see CoSine Sold for $24M and Will CoSine Get Carved Up?).
Tut manufactures a range of telecom equipment, including video trunking, digital TV, and broadband subscriber management devices. But, on a conference call this morning, Tut Systems execs said that the merger was not about getting hold of CoSines technology.
That was not the primary reason for doing the deal, according to one exec. Instead, the merger is all about "additional financial resources, netting Tut Systems around $22.75 million of CoSine's cash.
Tut execs on the conference call were at pains to promise continued support for existing CoSine customers, with a view to winning more business. We will take care of the customers, said one exec. There are a dozen or so key customers, and we will look to leverage the relationship with these customers for other business.
Should we be surprised by the deal? Kevin Mitchell, analyst at Infonetics Research Inc., doesnt think so. I am not that surprised, he says. I always thought that the buyer would be for the money and the customer contacts, not the product...