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Terayon buys Ultracom, inks China pact

Terayon Communication Systems Inc. (Nasdaq: TERN) announced it would buy privately held Ultracom for about $32 million, and followed up Tuesday with a deal for broadband deployment in China.

Shares jumped to 220 1/2 in after hours trading from a close of 216 5/8 Monday. The company's stock has been charging ahead since it said it would top sales and earnings estimates in its first quarter.

The company, a supplier of broadband network systems, said it will buy Ultracom Communications Holdings, a privately held supplier of broadband systems-on-silicon, for about $32 million in stock. The acquisition adds to Terayon's growing broadband portfolio, supporting communication over cable, wireless and DSL (digital subscriber line) connections.

The acquisition has been approved by Terayon's board of directors and is subject to various closing conditions.

Terayon said Tuesday it has been chosen by Shenzhen Topway Cable Net Co. Ltd., one of China's largest cable data net operators, for a major broadband deployment in China.

Terayon already has a deal with i-CABLE, Hong Kong's leading broadband service provider.

Shenzhen CATV, which currently has more than 650,000 subscribers, operates in the Shenzhen region, which has a special status as a technological innovation zone, the companies said. The deal will provide high-speed access in Lo Wu, Shenzhen's most densely populated area.

Terayon competes with companies such as 3Com (NAsdaq: COMS), Mototola (NYSE: MOT) and Samsung.

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