3Com to buy network telephony specialist

3Com announced late yesterday that it intends to purchase US network telephony specialist NBX for about $US90 million in cash as a way of expanding its presence in the market for that technology.

NBX, based in Andover, Massachusetts, specialises in developing telephony systems that run over small business LANs (local area networks) and WANs (wide area networks).

The deal is set to close next month and is likely to have an impact on 3Com's earnings per share in the company's fourth fiscal quarter by between 2 and 3 cents, 3Comofficials said. An in-process technology charge is expected to account for less than 20 per cent of the $90 million purchase price.

3Com is keen to move further into LAN telephony, estimating that the global market for the technology will be worth about $5 billion by 2003, with two-thirds of that business coming from small to medium-sized companies.

The acquisition will widen the distribution of NBX's products, while the company's sales force will provide an additional channel for 3Com's voice product offerings, 3Com officials said.

Yesterday's planned purchase comes after several other 3Com announcements linked to LAN telephony. In particular, in December last year the US company announced a joint-venture arrangement with Siemens AG to develop LAN telephony and multimedia products. This agreement built on a previous 18-month alliance between the two companies and the duo committed an initial shared investment of $100 million to establish the LAN telephony venture.

Founded in July 1996, NBX employs 90 staff and its main product is the LAN-to-telephone network gateway, NBX 100 Communications System. NBX 100 allows the consolidation of both voice and data on one network infrastructure and supports LAN, WAN and Internet connections, company officials said.

Last year, 3Com networking rival Cisco Systems announced a deal with NBX that involved integrating NBX's Ethernet phone equipment with Cisco's IP (Internet Protocol) voice-enabled 3600 series and 2600 series branch office routers.

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