And now for a sneaky grub of Post # 13000. It's my lucky number. :-)
August 25, 1999
Dow Jones Newswires
Newbridge Seen Buying IP Company Wednesday: Source
By Ben Dummett
TORONTO -- Newbridge Networks Corp. (NN) is expected to announce on Wednesday the acquisition of an Internet-based equipment vendor, as part of its long-awaited strategy to service the explosive growth of data traffic over the Internet, an industry source said.
The source wouldn't disclose the identity of the target company. However, Newbridge, Kanata, Ont., has long maintained that it wanted to get closer to its Internet-based affiliates in the Boston, including Northchurch Communications Inc., which makes superfast routers that work at the edge of Internet-based networks.
Newbridge owns about 60% of Northchurch.
Newbridge officials weren't immediately available for comment.
Officials at Northchurch Communications Inc. weren't immediately available for comment.
Newbridge Networks Corp., which is mainly known as a manufacturer of asynchronous transfer mode, or (ATM) network equipment, also owns a controlling stake in another Boston area company called Ironbridge Networks Inc.. Ironbridge makes high-speed routers that work in the core of an Internet-based network.
However, Ironbridge told Dow Jones last week it expected Newbridge's controlling stake in Ironbridge to drop to a minority position by the end of this year, assuming that Ironbridge completes its plan to raise up to $50 million in private financing.
Newbridge's expected acquisition later Wednesday doesn't come as a surprise since the networking equipment vendor has publicly stated that it would clarify its Internet-based strategy on two occasions by Sept. 23.
If the acquisition is announced later Wednesday, it would come a day after Newbridge reported slightly better-than-expected earnings for the fiscal first quarter. The company posted net of 18 cents a share, above the First Call mean estimate of 16 cents.
However, as a testament to the importance of Newbridge clarifying its Internet-based strategy, analysts reacted cautiously to Newbridge's latest numbers.
In a research note published Wednesday morning, RBC Securities Inc. said Newbridge is still mainly an ATM company, even though the market is becoming increasingly more Internet based. The note then goes on to say that, "barring some dramatic new product initiatives," RBC is maintaining its neutral rating on the stock.
-Ben Dummett;
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