Lucent buys router maker Xedia

Lucent buys closely held Internet equipment maker Xedia for $246 million in stock as it continues expanding its data network business.

Phone-equipment maker Lucent today said it is purchasing Xedia, a developer of Internet access routers for wide area networks, in a stock-swap worth $246 million.

Lucent Technologies expects the transaction to be completed in the quarter ending December 31. The merger, which will be accounted for as a pooling of interests, is expected to be neutral to earnings in fiscal 2000, the company said.

Today's announcement falls on the heels of another acquisition by Lucent announced earlier this week. As previously reported, Lucent agreed to buy International Network Services for about $3.7 billion in stock to attract customers with network-consulting services.

Based in Acton, Massachusetts, Xedia supplies high performance routers that deliver Internet Protocol-based Virtual Private Network (VPN) technology to corporations and service providers.

"This acquisition fills an important space in our enterprise data networking portfolio with award-winning products that are absolutely best-in-class," said Curtis Sanford, president of Lucent's InterNetworking Systems group, in a statement. "Xedia's fully integrated Access Point routing products will give Lucent a key advantage at the edge of the campus network, where corporations and service providers are coming together to deliver next-generation services, such as IP Virtual Private Networks."

Under the terms of the agreement, 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 90 employees will remain at the company's Acton, Massachusetts headquarters.