Interesting article I picked up from the Yahoo board. It is in two parts.
Mike
December 22, 1999
One Week View
Tellabs quietly sneaks up on Cisco, Lucent
By Kathleen Cholewka
NEW YORK. 4:47 PM EST-Tellabs (nasdaq: TLAB), nestled in the Midwest suburbs, has quietly built up an arsenal that
will help the company compete against the likes Cisco (nasdaq: CSCO) and Lucent (nasdaq: LU) in the next-generation
network equipment sweepstakes.
The Lisle, Ill.-based company does not go around tub-thumping about its latest and greatest technology. Instead, it lets its
products speak for themselves. While its rivals make multi-billion dollar acquisitions, Tellabs is happy to snap up smaller but
strategically important startups at much lower prices.
Today it acquired access equipment maker Salix Technologies for $300 million, a purchase is beginning to add momentum to
the slow, but definitive, entrance into the next-generation service provider market. "We may have been culturally quiet
before, but we're transitioning," says Bruce Sabalaskey, director of global business development at Tellabs.
Salix makes access equipment that allows service providers to offer data- and packet-based voice services. The startup,
which employs just over 40 engineers, also has valuable expertise in Internet protocol (IP) data networking. And while Salix
has no official customers, it claims its products are being tested in major telecommunications networks. The market for the
Salix's access equipment will be worth $3 billion in 2002, according to Sabalaskey.
Tellabs has made several astute acquisitions recently, including its purchase of high-speed router vendor Netcore for $575
million in stock in August 1999. In July 1999, Tellabs finalized its acquisition of Alcatel's (nyse: ALA) DSC Communications
businesses in Europe. That purchase, for $110 million in cash, gave Tellabs a leading fiber transmission product line, an
international presence and brought in two product lines--Cross Connects and Dense Wave Division Multiplexers (DWDM). |
