Tellabs plans to acquire privately held Vivace Networks, a multiservice IP edge switch vendor, for $135 million in cash and employee stock options. The deal is expected to close in the third quarter.
"Acquiring Vivace is the next step on Tellabs' path to profitable growth," says Michael J. Birck, chairman and CEO of Tellabs. "This move enables Tellabs to offer exactly what our customers around the world are looking for -- a next-generation platform that helps service providers smoothly migrate from today's services to the most profitable data services of tomorrow."
Tellabs sells transport and access products for metro and regional networks. Vivace Networks has multiservice IP switches that combine native Layer 2 switching and Layer 3 routing capabilities, enabling frame relay, ATM, Ethernet and IP services to be
transported over an MPLS core network. Tier 1 carriers in both the United States and Asia have deployed Vivace products. According to Tellabs, the deal between the two companies will enable the new company to offer a complete, global transport and data solution to address Layer 1, 2 and 3 network applications.
Tellabs plans to retain Vivace Networks' employees and offices in San Jose. Ken Koenig, CEO and co-founder of Vivace Networks, will become Tellabs senior vice president, advanced data products, and report to Ed Kennedy, president of Tellabs North America.
