In a move to strengthen its Internet protocol (IP) core routing competency, Lucent Technologies (Murray Hill, NJ) plans to acquire Marlborough, MA-based Nexabit Networks, a privately held terabit router start-up, for about 14 million shares of Lucent common stock. Based on Lucent's closing share price on Thursday, June 24, the transaction would be worth approximately $900 million.
Lucent expects to complete the transaction by July 31, 1999, accounting for the merger as a pooling of interests that is expected to be neutral to earnings in fiscal 1999 and fiscal 2000.
"This merger gives Lucent not only a leading product for ultra high-speed IP core networks, but a terrific lead in delivering terabit-speed switch/routers that connect directly to optical networking systems," says Curt Sanford, president, InterNetworking Systems, Lucent Technologies.
Lucent and Nexabit already have an agreement to integrate Lucent's dense wavelength division multiplexing (DWDM) optical components into Nexabit products. The joint work will enable Nexabit products to provide integrated switch/routing of IP traffic directly onto a DWDM optical core network at OC-192 rates of 10 Gb/s per wavelength, according to Lucent.
Mukesh Chatter, CEO and founder of Nexabit, will join Lucent as Advanced IP Core Technologies vice president in Lucent's InterNetworking Systems Group (INS).
Nexabit was founded in 1997 and employs more than 120 people. With its NX64000 Multi-Terabit Switch/Router, it claims to have the world's fastest switch/router, and the only system that can scale from gigabit to 6.4 Tb/s rates. Based on patented architectural innovations, the NX64000 not only has the highest capacity switch fabric per chassis at 6.4 terabits per second, but also the highest port density per chassis announced to date, according to Nexabit.
Unlike the current generation of IP switch routers, Nexabit's "third generation" product supports signals from OC-3 to OC-192 and will scale to even higher speeds as customer demands continue to expand, the company claims. The Nexabit switch/router supports IP, ATM, Frame Relay, and MPLS. The company also claims the lowest latency performance, which provides support for constant bit rate over IP, thus enabling the convergence of voice/video/data over IP in the network backbone.
This switch/router offers full redundancy, hardware hot-swap and in-service software upgrade, as well as direct connection with DWDM optical networking systems. The NX64000 is in beta trials with several service providers, including Frontier Communications, Road Runner, and OneNet.
Lucent's data networking acquisitions
The acquisition of Nexabit adds to Lucent's IP capabilities. These include the Cajun Campus Gigabit Ethernet Switch family, the PacketStar and GRF IP Switch families, the PathStar Access Server and Business Service Exchange, the MAX and PortMaster remote access server families, the Pipeline access products and the Lucent Technologies Softswitch, and the 7R/E product portfolio.
As a part of its data networking portfolio, Lucent also offers professional support services capabilities through NetCare Services, a broad set of consulting, integration, management and maintenance services for multivendor data and video networks, voice systems, and networks and call centers.