Do you know that one of the principals at Qtera is from JDSU ? Bob Ade ?? Here is a story from todays Palm Beach Post-
gopbi.com
Brains behind billion-dollar deal
By Stephen Pounds, Palm Beach Post Staff Writer
Friday, December 10, 1999
BOCA RATON -- Fahri Diner, Rick Aversano, Bob Ade, Ian Haxell and Xiang-Dong Cao could be on the verge of becoming millionaires -- many times over.
"Multi-, multi-millionaires," said stock analyst John Wilson of Warburg Dillon Read in Toronto.
The five founded Qtera Corp. to do what larger, well-heeled giants such as Lucent Technologies and Nortel Networks haven't done -- develop fiber-optic technology to push voice and data transmissions farther than anyone before them and to do it cheaper.
The tiny upstart in Boca Raton, on the cutting edge of light transmission, is said to be the takeover target of optical giant Nortel Networks of Ontario, Canada, the former Bell Canada. Nortel is offering $2.5 billion to $3.5 billion in stock for Qtera, according to The New York Times.
Both companies have declined to comment.
Qtera was founded last year by a group of scientists, engineers and telecommunication executives.
The name comes from joining "Q," the designation for high-quality transmission lines, with "tera," for terabit, or 1 trillion bits a second, the industry goal for sending data over fiber-optic lines.
The company's roots are in Boca Raton where two founders, Diner and Cao, jumped from Siemens Information and Communication Networks to start their own business. Diner said in an April interview that Qtera could beat telecom giants such as Lucent, Nortel and Siemens in advancing optical technology because it is has less bureaucracy.
Fahri Diner, Qtera's visionary chief executive, and Xiang-Dong Cao, its chief scientist, were part of a team that formed Siemens' Optical Networks business unit. Diner likes to call Boca Raton -- with Siemens as its largest company and Qtera its most promising startup -- "Photon Beach" for the particles in lightwaves.
Xiang-Dong Cao has the most college degrees of anyone in the company, including a master's in space physics earned in China and a doctorate in fiber optics from the University of Rochester in New York. He holds four patents in advanced optical transmission.
Bob Ade is vice president of product development. Before Qtera, he was a manager at San Jose, Calif.-based JDS Uniphase, where he led the development of high-speed transmission and wavelength routing technology. He earned a doctorate in applied physics from Columbia University and has several patents of his own.
Ian Haxell is chief engineer. Educated in England, Haxell oversees Qtera's transmission systems design. He came from Alcatel in France and holds 11 patents in long-haul fiber-optic transmission.
Rick Aversano is the entrepreneur. He has been an officer or key strategist in six technology start-ups.
Qtera's brainpower is an integral part of the Nortel deal and the reason for its high cost, said industry analyst Maribel Lopez of Forrester Research in Boston.
Nortel, Lopez said, would buy about 70 "optical engineers who they get for a year while their (Nortel) shares vest. These guys don't grow on trees. These are Ph.D.s that understand light waves less than the size of a human hair."
Nortel isn't alone in recognizing that Qtera, a privately held development stage company, has talent and a viable, valuable idea. Qtera has received $43 million in two rounds of financing from six venture capital firms, including $32 million in April -- one of the largest infusions of venture capital among South Florida businesses.
In return, it gave up three of six board seats.
Qtera employs 130, with 100 in Boca Raton and 30 in Richardson, Texas, a suburb of Dallas where Nortel and other telecommunication suppliers have plants.
On the other side of this deal is Nortel, with $17.5 billion is sales last year. It has 71,300 employees. Nortel will pull in about $5 billion this year for its optical networking business, and sales will grow 80 percent to 100 percent next year, Warburg's Wilson said.
The deal makes sense to Wilson.
"On the Street, we see it as a logical move for Nortel," he said. "Nortel is the fastest-growing optical systems provider in the world. Qtera's products work into those kind of networks. If you're the market leader, it makes sense to take Qtera before one of your competitors gets it."
A price in the billions for Qtera "would definitely be in the ballpark," Wilson said. "There's a broad realization that we're in the early stages of a global deployment of optical technologies. The demand for bandwidth (transmission capacity) is growing because we're all on the Internet, and the best way to get bandwidth is with fiber optics. There's nothing cleaner. And light is endless."
The valuation is in line with other deals this year.
In January, Lucent agreed to pay $20 billion in stock for California networking company Ascend Communications. In June, Lucent bought Nexabit Networks, a Massachusetts-based designer of high-speed-network switches, for $900 million. In August, Cisco Systems paid $7.4 billion for networking firms Cerent Communications in California and Monterey Networks in Texas.
Optical networking is cutting-edge technology that will change the way phone calls and Internet searches are transmitted. As light travels over a fiber-optic line, it weakens. When it does, a network's equipment converts it to an electrical signal and amplifies it, then reconverts it to light and sends it on its way.
The periodic need to amplify the signal is costly, and Qtera and other small companies are inventing ways to extend light transmission. Now, light is transmitted 250 to 375 miles before it needs to be amplified. Two weeks ago, Qtera completed a test in Colorado where it flashed a light signal more than 1,440 miles on fiber-optic line owned by Qwest Communications.
That had to catch Nortel's eye.
"Qwest said they have the Qtera stuff, and it actually works," Forrester's Lopez said. "If there is a hole in Nortel's strategy and Qtera has a product to fill it, (Nortel) becomes the best solutions provider."
stephen_pounds@pbpost.com |
