Nortel buys U.S. start-up firm for $290 million
Reuters Story - March 18, 1998 18:09
%ELC %SP500 %CA %US %TEL NTL.TO NT V%REUTER P%RTR
(All figures in U.S. dollars unless otherwise stated)
TORONTO, March 18 (Reuters) - Northern Telecom Ltd.
said on Wednesday it acquired U.S. start-up
Aptis Communications Inc. for about $290 million in Nortel
stock and cash in a bid to increase its Internet product line.
Nortel, based in Brampton, Ontario, is the world's sixth
largest telecommunications equipment maker. It plans to merge
Chelmsford, Mass.-based Aptis, which provides access switches
to network service providers, carriers and Internet service
providers, with one of its existing wholly-owned units.
Under the arrangement, Aptis security holders would receive
Nortel common shares, cash or a combination of both. Nortel
said part of the purchase price depends on the achievement of
unnamed milestone events.
The deal, expected to close in 1998's second quarter, is
subject to regulatory approval and other conditions, Nortel
said.
In a press release the company said that "with this
acquisition, Nortel drives toward a leadership position in the
access and virtual private networks arena and demonstrates its
commitment to build the New Internet -- a faster, more
reliable, more profitable Internet."
John Drolet, a Yorkton Securities analyst, said this latest
acquistion is part of Nortel's thrust to expand its Internet
product offerings. The company is currently working on products
to help businesses cope with overloaded telephone lines as more
and more people use the Internet for longer periods of time.
Nortel has said it will acquire the technology if it cannot
develop it, Drolet said. "All of this is necessary for the
rapid growth of the Internet."
Nortel shares fell C10 cents to C$86.70 on the Toronto
Stock Exchange but rose 19 cents to $61.31 on the New York
Stock Exchange.
($1=$1.42 Canadian) |
