Adding to the hotbed of acquisitions and product ramp-ups in the optical networking space, Redback Networks is acquiring fellow newcomer Siara Systems in a deal valued at $4.3 billion.
The combined force will be worth $11.2 billion and will marry Siara's yet to be released IP, Asic and optical technology with Redback's equipment for directing and managing digital subscriber line (DSL) traffic.
For $4.3 billion, Redback will inherit Siara's 170-strong engineers and senior officials, which include two architects from AMD's K6 microprocessor team, plus a number of former key executives from networking giants such as Lucent, Cisco and Nortel. The deal will also add the crucial hardware element to Redback's mainly software oriented products.
Said Dennis Barsema, Redback chief executive and president: "We expect the combination of Siara Systems and Redback to create a powerful supplier in the communications industry, focused on serving the next generation access and service creation requirements of carriers and service providers."
Siara is developing a platform for IP services that runs over optical networking equipment in the so-called metropolitan area network market. The products are aimed at helping carriers and service providers upgrade their Sonet voice equipment, mostly used in the US, to carry IP-based data. Siara also wants to enable customers to specify the features of their networking equipment with the use of custom design ASICs.
The deal is the latest in a series of moves by networking players to establish a pivotal position in the lucrative optical networking market. In August Cisco boosted its offerings with the acquisitions of Cerent and Monterey for $6.9 billion and $500 million, respectively, encouraging Nortel and Lucent to respond by outlining their respective optical strategies within weeks of each other.
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