UK networking vendor Madge Networks signalled its continuing commitment to the token ring market today, with the $15 million acquisition of Olicom's token ring operations.
The move follows Madge's announcement last week that it had split its operations into autonomous network services and token ring divisions, Madge.connect and Madge.web.
Madge.connect chief executive Mike Wilson said the takeover would accelerate Madge's research and development activities and had been mooted for several months.
The sale includes the transfer of an unspecified number of sales, research and services staff from Olicom's European and international operations.
Madge would continue selling both product lines initially, but would ultimately merge the two ranges, Wilson said.
Director of network research at IDC Europe, Pim Bilderbeek, said Olicom had been struggling to make a profit from its token ring business and was in the market to sell.
IBM and Madge were the only logical buyers and the move would deliver market share and efficiency gains, rather than technological advances, to the latter, Bilderbeek said.
"One company will be doing the things two companies were previously doing," he said.
Madge has no further takeovers in the pipeline but this could change, Wilson said.
"As we evolve forward, I wouldn't rule out more acquisitions," he said.
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