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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: pat mudge who wrote (6422)	9/10/1998 7:49:00 AM
From: Glenn McDougall	Read Replies (2) \| Respond to of 18016

Newbridge sells firm Swedish telecom giant buys affiliate for $285M US By SIMON TUCK, Ottawa Sun NEWBRIDGE Networks has sold majority ownership of one of its affiliates to fellow telecommunications giant Ericsson AB, the companies announced yesterday. The Swedish company paid $285 million US for Advanced Computer Communications (ACC), a network access firm not considered one of Newbridge's stronger affiliates. The deal is unusual in that Newbridge will maintain a relationship with ACC, including research, manufacturing and reseller arrangements, and will continue to sell ACC's network routing and Tigris remote access technologies. Ericsson will also work with Newbridge to develop a new computer network system to speed up data transmission on the Internet, the Kanata company said. At least one analyst described the ACC sale as "an absolutely superb deal" from Newbridge's perspective. "ACC was not one of Newbridge's shining jewels," said Duncan Stewart, a technology analyst at Tera Capital Corp. in Toronto. "I think any price they get for it would have been a good one and I think this was an excellent one." But Robert MacLellan, of Kearns Capital Limited in Toronto, called the move "a step back" because, he said, Newbridge needs to expand its product line not reduce it. On the other hand, MacLellan said it's encouraging that Newbridge may be starting to act more strictly -- like a venture capital firm -- with its affiliates. Although Newbridge boss Terry Matthews said yesterday the company has no plans to alter its affiliate strategy, the ACC sale may be part of a corporate restructuring triggered by the appointment of new president Alan Lutz. Stewart, however, said Lutz is likely behind the changes. "It appears something is going on there. "The affiliate program will look enormously different in a year from how it looks today." Matthews also denied that the Ericsson deal has any connection to Newbridge's tumultuous relationship with Siemens AG, its German partner. "(This deal) is not against our interests with Siemens or anybody else." But Stewart described it as "an encouraging sign that the Newbridge-Siemens relationship is perhaps deteriorating but that there are potential successors lining up." Newbridge is coming off a disappointing period. It announced profits of $35.5 million for the three months ended Aug. 2, well below the $64.4 million it made in the same 1997 period. Newbridge shares have dropped by about two thirds in less than a year, from a high of $95, closing yesterday at $32, up 60cents. Much of the firm's problems stem from losses at UB Networks, the California-based computer networking firm acquired early last year for $147 million.