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MURRAY HILL, N.J.--(BUSINESS WIRE)--Dec. 10, 1997--
Purchase of Prominet Adds to Growing Data Networking Portfolio
In another move to address high-growth opportunities in the data networking
business, Lucent Technologies today said it will acquire Prominet
Corporation, a Marlborough, MA.-based start-up developer of high-performance
local area network (LAN) switching equipment, for approximately $200 million
worth of Lucent stock. Prominet is a leader in developing switches that
connect PCs, workstations and servers using Gigabit Ethernet and integrated
routing, which is referred to as Layer2/Layer 3 capabilities in the data
networking industry. The transaction is expected to be completed by the end
of the quarter ending March 31, 1998.
In September Lucent introduced a strategy to address the data networking
business and announced a series of new and enhanced products.
"When we unveiled our new products, we recognized that network managers
would look to two technologies to deliver high performance data connectivity
- ATM and Ethernet," said Bill O'Shea, president of Lucent's Data
Networking Systems group. "At that time we announced a portfolio of
intelligent switches based on ATM technology. Today we fill in a key
component of our intelligent switch offer with this acquisition of Prominet,
a leading developer of Layer 2/Layer 3 Gigabit Ethernet LAN technology."
"Computer users have an insatiable demand for more bandwidth to communicate
through LANs and over wide area networks like the Internet," O'Shea said.
"That's why the Gigabit Ethernet industry is expected to grow from infancy
today to $1 billion by 2000."
"Prominet meets this need with best-in-class Gigabit Ethernet technology
that integrates switching and routing functionality to smash through
existing network bandwidth bottlenecks. We are acquiring technology that is
clearly next-generation in performance, yet compatible with more than 80% of
the networks users have in place globally today," he said. "We are also
impressed with how quickly Prominet has built its worldwide reseller
channel, which will help ensure the success of this Gigabit Ethernet
initiative."
Menachem E. Abraham, president and CEO of Prominet, will join Lucent as
president, Gigabit Ethernet Switching Products, in its Data Networking
Systems group.
"When we founded the company in 1996, our goal was to develop and deliver products that would make Prominet the leader in gigabit-scaled campus
networking," Abraham said. "We are keeping that promise with the delivery
of products that clearly are ahead of the industry."
"But leadership is more than the best technology," he said. "We are joining
a Lucent data networking team on the move. It is backed by Bell Labs, has a
proven heritage of premier customer relationships and delivers a leading
professional services and support capability. Together we will set a new
standard in campus networking."
The Prominet group will team with Lucent's data networking organization in
Concord, MA., only minutes from the Prominet headquarters in Marlborough.
The purchase is expected to result in a one-time, non-cash charge against
earnings. The charge involves an accounting writeoff assigned to in-process
research and development and will be taken in the second fiscal quarter of
1998 assuming the transaction is closed by March. 31, 1998. Excluding this
one time charge, the impact of the purchase to earnings in fiscal 1998 is
expected to be immaterial.
Prominet, a privately held corporation founded in 1996, designs, builds and
markets a new generation of network center and high-performance workgroup
LAN solutions serving campus LAN customers globally. The company employs
more than 80 people.
In September, Prominet began shipping its highly reliable P550(TM) Cajun(TM)
Switch -the industry's highest-capacity, multilayer switch that provides
10/100/1000 megabits per second of capacity in a compact, fault tolerant
7-slot chassis. The P550 Switch's 45.76 gigabits per second (Gbps) of total
backplane capacity means network managers can deliver more than 33 million
packets per second of system throughput.
In the first half of 1998 Prominet expects to begin customer trials of the
P550(TM) Cajun(TM) Switch with Integrated Routing, enabling scalable,
packet-by-packet, IP and IPX routing at wire speed with all the unrivaled
Layer 2 switching capabilities of the initial P550 Cajun Switch - in the
same 7-slot chassis. This new technology performs the same Layer 3
functions as legacy software-based routers, but at multi-gigabit speeds and
at a fraction of the cost. The silicon-based implementation enables full
multi-level Quality of Service (QoS) capabilities, including the ability to
make routing and prioritization decisions based on Layer 3 and Layer 4
application information, all at full 10/100/1000 wire speeds.
In September, Lucent introduced an enhanced portfolio of intelligent
switching, access and network management products as a part of its plan to
dramatically improve data networking performance.
In October, Lucent said it will acquire Livingston Enterprises, Inc., of
Pleasanton, Calif., a leading provider of remote access networking solutions
for the Internet. The transaction is expected to be completed this month.
As a part of its data networking portfolio, Lucent also offers
industry-leading professional support services capabilities through
NetCare(R) Services, a broad set of consulting, integration, management and
maintenance services for multivendor data and video networks, voice systems
and networks and call centers.
For more information on Prominet, browse the company's home page at
prominet.com.
Lucent Technologies designs, builds and delivers a wide range of public and
private networks, communications systems and software, business telephone
systems and microelectronics components. Bell Labs is the research and
development arm for the company. More information about Lucent
Technologies, headquartered in Murray Hill, NJ, is available on its Web site
at lucent.com.
(Editor's Note: There will be a media conference call today at 1
p.m. EST with Bill O'Shea, president of Lucent's Data Networking
Systems group and Menachem E. Abraham, president and CEO of
Prominet. Call-in numbers: USA/Canada 1-800-553-0272; other
locations 1-612-332-0228)
CONTACT: For Lucent: For Lucent:
John Callahan Lynda Beighley
908-953-5350 (office) 908-582-3060 (office)
703-758-1449 (home) 973-635-7959 (home)
johncallahan@lucent.com lbeighley@lucent.com
or
For Prominet:
John H. Ricciardone
508-303-8885 x234 (office)
781-334-5754 (home)
john_ricciardone@prominet.com
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