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Here's the article jon mentioned:..cmg
Beauty Is Truly In The Eye Of The Beholder
John T. Mulqueen
How many companies would want to buy a business whose sales have
declined from $120 million two years ago to $80 million last year, and
are going to be between $40 million and $50 million this year?
Especially when that company had already been sold twice?
Not many, probably. But MRV Communications Inc. paid $35 million to
obtain Xyplex Inc. from Whittaker Corp. Xyplex is the Massachusetts
company that had some good terminal communications products in the late
'80s and early '90s, then tried to move upscale in the internetworking
market.
It struggled for awhile, then was sold to Raytheon Corp. about four
years ago for $170 million when that defense contractor thought it would
like to have some new, healthier markets other than the shrinking arms
industry. But Raytheon left Xyplex alone until Whittaker bought it for
$120 million a couple of years ago. Whittaker has made some halfhearted
attempts to break into the networking equipment business, including
purchasing Hughes LAN Systems Inc., a subsidiary of Hughes Electronics
Corp. Whittaker is also a defense holding company and seems to have
treated Xyplex the same way Raytheon did.
"They just left it alone," says Noam Lotan, president of MRV
Communications Inc. "Xyplex didn't get the input of resources or R&D
that it needed." Sales fell because there were no new products, he adds.
But for $35 million, MRV will get from Hughes the ATM switching hub
(even if it is aging), which was included with Xyplex, and Xyplex's WAN
and switching products. And it will get 350 employees-92 of them in
R&D-and 65 customer-support people. Those engineers bring knowledge of
WAN technology, including bandwidth management, security and multiple
protocol routing, Lotan says. EdgeBlaster, a remote-access server
introduced last year that hasn't shipped yet, will be out within three
months, he says.
MRV makes Gigabit and Fast Ethernet switches and hubs, and fiber-optic
transmission components for telecom and cable TV networks. Several
big-switch manufacturers-Digital, Fujitsu Inc., Intel and Newbridge
Networks Corp.-act as OEMs for its switches.
Lotan says that MRV is now a holding company itself. Xyplex becomes part
of NBase, the networking unit of the company. He says the goal is to
make NBase a small Cisco, and will target ISPs with Xyplex's products.
He notes that ISPs are multiplying rather than disappearing, and that
sales that would be small for a Cisco or Bay Networks will be important
for MRV.
John T. Mulqueen is industry business editor at InternetWeek.
Copyright (c) 1998 CMP Media Inc. |
