Alcatel is the latest telecoms switch manufacturer to beef up its data product line with the acquisition of Gigabit Ethernet vendor Packet Engines for $315 million (#185 million).
Alcatel's share price plunged towards the end of last month after it announced that the Russian and Asian financial crises will force its 1998 financial performance to be below expectations.
Alcatel hopes the deal will boost its presence in the US and assist in its strategy to enter the IP and data communications market.
Packet Engines will retain its name and location in the US with President and CEO of Alcatel's recently-created US division, Krish Prabhu, as Packet Engines' chairman. Packet Engine's founder, Bernard Daines, will remain as CEO.
"It means distribution for our products all round the world," said Daines.
"A venture capital-funded company has to sell someday and it was our turn.
We fit into Alcatel's plans to move into the IP space which is a growing area of demand, and to do this they needed our Gigabit Ethernet switch."
Last month, Alcatel nearly doubled its U.S. presence after winning approval from the Department of Justice's Antitrust Division, to acquire DSC Communications.
Packet Engines' product lines will complement Alcatel's current data and enterprise products with high-end routers and Gigabit Ethernet LAN switches, the companies said. Packet Engines' products will be sold in conjunction with Alcatel products, that include SONET transmission systems, Asynchronous Digital Subscriber Line (ADSL)systems, broadband switching systems and telephone exchanges.
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