Lucent snaps up high-speed Net firm for $1.3 billion
The company, continuing its string of acquisitions for Internet expertise, says it will spend $1.3 billion to purchase Spring Tide Networks, a maker of high-speed Internet technology.
Spring Tide's technology offers inexpensive and secure high-speed connections to corporate networks over the public Internet. The start-up builds networking equipment that lets telecommunications carriers and Internet service providers offer Internet-based services to customers, such as virtual private networks (VPNs).
Lucent, which previously owned a 4 percent stake in Spring Tide, will exchange about 26.8 million shares to buy the rest of the company.
The purchase allows Lucent to better compete against rivals Cisco Systems, Nortel Networks and start-ups like Cosine Communications in the VPN market, which is expected to grow from $751 million in 1999 to $14.4 billion by 2002, according to analyst firm Forrester Research.
Cisco in January beefed up its VPN offerings by acquiring Altiga Networks and Compatible Systems for $567 million in stock, while Nortel acquired Shasta Networks last year.
Another recent Internet technology acquisition for Lucent was last week's acquisition of fiber-optics firm Herrmann Technology for $438 million in stock.
Separately today, Cisco Systems spent $175 million to buy Komodo Technology, a start-up that makes voice-over-Internet Protocol devices. Komodo makes equipment that allows service providers to offer Internet-based services to customers with regular analog phones.