Dave, It's been WAY too long......where are you? We miss you! I'd love to see your opinion on the following.....it's effect, if any, on TLAB. Thanks :)
Lucent to Buy Network Switching Gear Maker
By Mark Weinraub
NEW YORK (Reuters) - Lucent Technologies Inc., the world's largest telecommunications equipment maker, on Tuesday said it would buy network switching gear provider Spring Tide Networks for about $1.3 billion in stock to broaden its product portfolio.
``This is going to help (Lucent) get into markets that they currently do not serve,'' said Michael Neiberg, managing director at Chase H&Q.
Spring Tide will help Lucent (LU.N) develop Internet product and services, an area with strong growth potential, he said.
Lucent said it would take a one-time charge for the write-off of in-process research and development in the quarter the deal closes. It said the acquisition, scheduled to close by September, is expected to cut its pro forma earnings per share for continuing operations by about 1 cent in fiscal 2001.
Shares of Lucent were off 2-3/8 to 47-7/8 -- a new 52-week low and its lowest level of the day -- in midday trade on the New York Stock Exchange. The stock has traded as high as 84-3/16 in the past year.
Lucent said the Spring Tide deal was worth $1.3 billion based on Lucent's Monday closing stock price of 50-1/4. The decline in Lucent shares on Tuesday shaved about $66 million from the value of the transaction.
Murray Hill, N.J.-based Lucent said it would issue 26.8 million shares to buy privately-held Spring Tide, which is headquartered in Maynard, Mass.
Neiberg said the price of the deal sounded reasonable.
Lucent already holds a 4 percent stake in Spring Tide.
``Spring Tide's people, technology and equipment will play a crucial role in our broadband Internet infrastructure strategy,'' said Janet Davidson, president of Lucent's InterNetworking Systems business.
The move comes less than one week after Lucent posted a fiscal third-quarter loss and cut its revenue and profit growth outlook, sending its stock down 16 percent. At that time, the company announced the long-expected spin-off of its microelectronics unit, which makes optical components and semiconductors.
Lucent has been working to rebuild investors' confidence since it posted a 23 percent drop in first-quarter profits, due in part to its inability to make new-generation products fast enough to keep up with growing demand.
12:21 07-25-00 |
