January 14, 2010 (FinancialWire) — MRV Communications, Inc. (OTC: MRVC) said it has completed the sale of its 90 percent interest in EDSLan S.p.A., a communication equipment distribution company located in Milan, Italy, to the current management of EDSLan.

MRV CEO Noam Lotan said the divestiture is intended to strengthen his company’s balance sheet by adding around $11.5 million in cash and eliminating the short-term debt at EDSLan, which he said was around $7 million at September 30, 2009. He added that the move will also allow MRV to sharpen its focus on the company’s core businesses and growth prospects.

A share purchase agreement governing the terms of the sale provided for the payment of a dividend of two million Euro to MRV, the subsequent sale of MRV’s shares of EDSLan for six million Euro and payment of a portion of fees of Todah S.r.l. an investment bank, and the cancellation of a U.S. $918,000 put option otherwise due by MRV by December 31, 2009.

The buyers also entered into a distribution agreement requiring them to purchase and distribute a minimum of two million Euro of MRV’s products over the next three years. The transaction closed on January 7, 2010.

According to MRV, EDSLan contributed around $44 million in revenue to MRV in the first nine months of fiscal year 2009 and $73 million and $70 million in fiscal years 2008 and 2007, respectively. As of December 31, 2009, EDSLan had approximately 86 employees.

California-based MRV Communications is a networking company with a line of packet-optical transport, carrier Ethernet, 40G and out-of-band networking equipment, services and optical components for high-speed carrier and enterprise networks. The firm specialized aerospace, defense and other communications networks.

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