UB Networks is to be acquired by Newbridge Networks six months after parent company Tandem Computers put it up for sale.
Newbridge signed a letter of intent with Tandem yesterday and the buy-out is expected to be completed by the end of January. The acquisition is good news for UB, which has struggled to compete in the commercial Lan market with networking giants like Cisco and 3Com.
?UB Networks is not at the technology forefront. It doesn't have the R&D backing and a constant stream of products like 3Com and Cisco,? said Camiel Camps, research analyst at IDC in Europe. According to Camps, Tandem does not want to be in the Lan market any longer. "Its focus is on larger networks and high end computers, not really in the commercial Lan market,? he said.
Newbridge, until now, has had a fairly minor presence in the Lan market and the acquisition is expected to accelerate the company?s penetration of the enterprise space. ?A major portion of our revenue doesn?t come from the Lan area at the moment but it is an enormous market. The acquisition will help us take a big step in that direction. Now we can build on the products we have got,? said John Everard, European president.
Although no financial details of the pending deal have been released Newbridge posted revenues of $900 million over the year ending 30 September and UB?s results in the same period were $377 million. According to sources, Tandem valued UB Networks at $90 million when it discontinued the company?s operations in July and put it up for sale.
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