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June 25, 1999 8:54am
Lucent to acquire Nexabit for $900M
By TIffany Kary
ZDII
Lucent Technologies (NYSE: LU) said Friday it will buy Nexabit Networks, developer of high-performance Internet Protocol (IP) wide area network (WAN) switching/routing equipment, in a deal valued around $900 million.
The price is based on Lucent's Thursday closing share price of $64, and the exchange of 14 million Lucent shares. The privately-held Marlborough, Mass-based Nexabit had rejected recent buyout offers and announced its intent to go public.
Nexabit designs the "super switches'' that operate at terabit rates -- one trillion bits or more per second -- intended for the next generation Internet, set to arrive along with the broadband revolution.
In a statement, Lucent's Curt Sanford, president of InterNetworking Systems, said the Nexabit deal will round out the company's portfolio to include "the leading IP core switch/router technology for next-generation networking, the leading multiservice ATM technology delivering absolute quality of service, the leading core optical networking technology, the leading software capabilities to integrate these networks together."
That statement is a powerful mouthful, and it's apt to be a tough chew for competitor Cisco (Nasdaq: CSCO). Cisco makes networking gear, while Lucent makes equipment for telecommunications firms such as Bell Atlantic Corp. (NYSE: BEL), and AT&T (NYSE: T). The two are on a collision course as voice and data networks are converging.
The merger of Lucent and Ascend, which was completed yesterday, was made to bolster Lucent's networking portfolio. |
