By Sam Boughedda
Investing.com -- Casa Systems Inc (NASDAQ:CASA) announced Monday that it has been awarded a multi-year purchase contract from Verizon Communications Inc (NYSE:VZ), causing its shares to rally 72%.
Casa Systems, a provider of physical and cloud-native infrastructure technology solutions, said the agreement will see it provide its 5G network function to Verizon to power Verizon's public Mobile Edge Compute service, which moves computing resources onto cloud servers.
In a further boost to the Casa Systems stock price, it was also revealed that Verizon plans to invest approximately $40 million in Casa stock, resulting in a stake of 9.9%.
"This announcement is an important milestone for our 5G Core and Security Gateway technology, as well as the growth potential of our business," said Jerry Guo, President, and CEO of Casa Systems.
"Our cloud-native approach is at the foundation of today's agreement and represents an important pivot in the telecommunications industry," added Guo.
According to TheFly, Casa systems noted in a conference call that the Verizon deal is a $140 million maximum over six years, with a guaranteed $20 million minimum.