ACT Networks Inc. Plans Acquisitions

ACT Networks Inc., a Camarillo producer of equipment for sending voice, video and data over telephone lines, expects to grow through acquisitions, paying for them with a combination of cash and stock, according to Martin Shum, chairman and president.

ACT is expected to use $35 million it received from an initial public offering in May to expand its product line through the acquisitions.

Shum declined to identify any prospective acquisitions, but said he hopes to buy “small companies that make telephone switches, and also small software companies.”

ACT is targeting small and medium-sized companies with annual revenues between $50 million and $200 million. ACT has $30 million in cash on its balance sheet.

But the company could be hurt by pending legislation that would revamp the nation’s telecommunications laws. Such a bill might allow Baby Bell phone companies to make equipment similar to that produced by ACT.

Shum, however, said he is not worried about such competition.

“I don’t think the Bells will just jump right into manufacturing,” he told Bloomberg Business News. “They are more service-oriented. They will jump into the consumer side first, rather than niche manufacturing products.”

He said he hoped the Bells, which have been actively adding call-routing devices to their networks recently, are ready to use companies such as ACT to help them expand the services they offer.