Lucent Technologies (NYSE: LU) said Friday it has agreed to buy Xedia Corporation, a privately held developer of Internet access routers for wide area networks, in a deal valued at $246 million.
Shares in the Murray Hill, New Jersey-based network and communications systems specialist were up 1 1/4 to 65 Friday morning, below their 52-week range of 79 3/4.
The exchange of about 3.86 million shares of Lucent common stock based on Lucent's closing price on August 12, value the deal at $246 million. Lucent expects the transaction to be completed in the quarter ending December 31, 1999.
Lucent has been snagging companies, such as International Network Services (Nasdaq: INSS) to target the growing market for next-generation networks and build ammunition as it takes on rival Cisco Systems Inc. (Nasdaq: CSCO).
Based in Acton, Massachussets, Xedia supplies high performance routers that deliver next-generation, Internet Protocol-based Virtual Private Network (VPN) solutions to corporations and service providers.
The acquisition fills an important space in Lucent's enterprise data networking portfolio, said Curtis Sanford, president, Lucent's InterNetworking Systems group in a company release.
Ashley Stephenson, chairman of Xedia, will become vice president and chief technology officer of Lucent's Enterprise WAN Systems group. Robert Steinkrauss, president of Xedia, will become vice president and general manager in Lucent's Enterprise WAN Systems group.
Xedia's customer base may also be an asset to Lucent. It includes MCI WorldCom's UUNET, PSINet, Concentric Network and Sprint. In addition, Xedia has significant relationships with established partners such as Westcon, Verio and Copper Mountain.