Intel buys VxTel for US$550M

Intel Corp. agreed Monday to buy privately held semiconductor company VxTel Inc. in a deal worth US$550 million, in an attempt to strengthen Intel's growing communications and networking arsenal. [Note to editors: New information appears in bold.]Intel was particularly interested in the VxTel acquisition due to its VoIP (Voice over Internet Protocol) product designed to deliver voice and data over next-generation optical networks, Intel and VxTel said in a conference call with press and analysts. Fremont, California-based VxTel was founded in March 1999, and also has offices in Irvine, California; Boulder, Colorado and Bangalore, India.

Intel looks to use VxTel's technology to speed the development of technology for turning traditional telecom networks into ones that deliver packet-based data over an optical infrastructure.

Once the purchase has received standard regulatory approval, VxTel will be integrated into Intel's Telecom Component Division, which is part of the company's Network Communications Group, Intel and VxTel said. Shri Dodani, the current President and Chief Executive Officer of VxTel, will continue to head up Intel's new division once the acquisition is completed.

The VxTel acquisition will complement Intel's 1999 merger with Dialogic Corp. and its 2000 purchase of Digital Systems Inc., according to Mark Christensen, vice president and general manager of Intel's Network Communications Group.

VxTel has worked with Dialogic, now an Intel subsidiary, over the past nine to 12 months on product development, although the companies declined to offer details. That work sparked Intel's interest in VxTel, Intel officials said.

Dialogic designs hardware and software to help join Internet-based data delivery with telecommunications technology. The company works in the voice, fax, data, speech recognition, call-center management and IP telephony applications segments. Similarly, VxTel also aims to push convergence of voice and data networks. The company plans to release its silicon-based products to telecommunications carriers later this year, hoping to help vendors improve packet-based voice and data networks.

VxTel will join Dialogic and Trillium in Intel's Internet Exchange Architecture (IXA) group, which focuses on hardware and software products for network and communications systems. Trillium currently makes communications software for adding onto Intel's IXA platforms.

Intel, based in Santa Clara, California, can be reached at +1-408-987-8080 or http://www.intel.com/. VxTel, in Fremont, California, can be contacted at +1-510-979-2100, or online at http://www.vxtel.com//.

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