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To: Boris Reynov who wrote (11925)	4/14/1999 9:20:00 AM
From: Spartex	Respond to of 12559

Recent ERICY acquisition FYI. A Torrent of Cash: Ericsson Buys Md. Firm By Mark Leibovich Washington Post Staff Writer Wednesday, April 14, 1999; Page E01 The local technology sector spawned its newest litter of young millionaires yesterday. Torrent Networking Technologies Corp., a Silver Spring maker of communications equipment, was sold for $450 million in cash to Ericsson AB, the world's third-largest mobile telephone company. Privately held Torrent employs 85 people, 67 in the Washington area, and virtually all of them own stock in the company. As a result of the buyout, 15 to 20 of Torrent's employees reaped -- or will reap -- seven-figure windfalls, according to a company source. A champagne-and-buffet bash is planned for noon today at the Silver Spring Holiday Inn. Phil Herget, managing director at Columbia Capital, said the deal represents a milestone for the burgeoning local technology sector. "This is a huge win for the Washington area," said Herget, who is a member of Torrent's board of directors. "It is another affirmation that important data networking and Internet work is being done in this region." Torrent was founded in August 1996 by Hemant Kanakia, a Bombay native and veteran of Lucent Technologies' storied Bell Laboratories in New Jersey. At Bell, Kanakia developed the key components of the product on which he would eventually build his business. Essentially, it is a box-shaped contraption that helps companies route data through the Internet with advanced speed and sorting capability. Kanakia started Torrent a few months after he left Bell Labs, honing his invention at his home near the University of Maryland in College Park, where his wife is a professor of sociology. Today, the 46-year-old Kanakia is Torrent's largest individual shareholder. A consortium of venture capitalists owns most of the rest, the largest being Alexandria-based Columbia Capital, which owns about a 35 percent stake, according to a Torrent official. Yesterday's acquisition came together quickly. Most of the heavy negotiating happened in one day last month. Stockholm-based Ericsson had been looking for a cutting-edge tool that is based on the Internet technology that routes the majority of data on corporate networks and the global network. Torrent apparently fit this bill. And at 10 o'clock on the morning of March 19, two limousines carrying Ericsson executives and their Merrill Lynch bankers showed up in Silver Spring. There, they met with Torrent officials and bankers from BancBoston Robertson Stephens. They planned to stay until 2 p.m. but wound up staying until 1 a.m. "By the time they left, we had signed term sheets and exclusivity agreements," said Torrent chief executive Jean-Luc Abaziou, who joined the company just three months ago. In the following weeks, the parties ironed out remaining details and conducted "due diligence" inquiries. Ericsson's board of directors voted its approval of the deal Saturday, and Torrent informed its employee shareholders yesterday morning. The acquisition requires no regulatory approval and is now considered closed. Abaziou and Kanakia will retain executive positions at the combined company. Torrent will become part of Ericsson's data-networking division, based in Burlington, Mass. Torrent is a "key piece of our puzzle," said Jeff Low, Ericsson's vice president of business development. Torrent will continue to operate out of Maryland, and no layoffs are planned. On the contrary, Abaziou projects that the company will double in size over the next 12 months. He said it remains uncertain what will become of the Torrent brand name. "This is like a small baby I brought into the world," Kanakia said. "Finally it's time to send it off to college. I'm sad and happy at the same time." © Copyright 1999 The Washington Post Company washingtonpost.com