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Lucent gobbles up VoIP company

The buy, which will cost Lucent $295 million, is designed to boost the company's voice over Internet Protocol armory.

Lucent Technologies will buy privately held Telica to boost its voice over Internet Protocol offerings, the companies said Monday.

The network equipment maker is hoping that by integrating Telica technology with Lucent's VoIP portfolio, it will be able to bridge the gap between its next-generation and legacy networks. Lucent said the Telica technology will complement internal development at its Bell Labs.

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Lucent will acquire the Marlborough, Mass.-based company for about $295 million in stock and options, as well as employee-related cash payments. Lucent will exchange 92.7 million shares of common stock and options for all of Telica's equity. The deal is likely to close during the last quarter of 2004, if it wins a regulatory nod. Lucent said the acquisition may dilute earnings in fiscal 2005 by about 1 cent or 2 cents per share and may add to the bottom line in fiscal 2006.

VoIP is fast catching on, as businesses look for cheaper ways of making telephone calls. The technology allows long-distance calls to be placed over the Internet and over private corporate networks, instead of the traditional phone system, which is heavily regulated and taxed. Competition is heating up among providers of Net phone services, and traditional phone companies have also begun to offer these services.

Telica has been selling VoIP products like media gateways and controllers under the Plus brand name. These products will now be marketed as part of Lucent's Accelerate portfolio, which was announced in November.

The VoIP company has about 250 employees worldwide. Its founder and CEO, John St. Amand, will become part of the division of Lucent that handles integrated network products.

"Telica has a proven VoIP portfolio and has already sold its systems to more than 50 customers in a wide range of applications and networks," Janet Davidson, president of Lucent's Integrated Network Solutions unit, said in a statement. "Their products give us a more complete, highly scalable VoIP solution and a flexible, open architecture to respond to the many different approaches our customers are taking with the evolution of their networks."