Redback Networks, which makes high-speed networking equipment, said it has agreed to acquire privately held upstart Merlin Systems in an all-stock deal worth about $57 million. Merlin, based in Fremont, Calif., develops metropolitan optical equipment for carriers and service-providers targeting smaller central offices and multitenant units. The deal, which is subject to customary closing conditions, is expected to close during the third quarter.
Earlier this week, shares of Redback took a hit after the abrupt departure of CEO Vivek Ragavan. The struggling company, based in San Jose, Calif., has also recently announced a profit warning and layoffs.