Tekelec absorbs Santera

Tekelec Inc. is buying a controlling share of Santera Systems Inc. to form a US$40 million, 275-employee subsidiary that will sell a portfolio of softswitches, media gateways and signaling gateways.

The subsidiary will combine each company's respective Linux-based packet telephony gear. Tekelec makes GenuOne, a signaling/call-control platform for TDM, IP and ATM networks. It includes Class 4 trunking capabilities and a media gateway that converts TDM voice to packets, and vice versa.

Santera makes Santera-1, a switching platform that can function as a Class 4 trunking switch like GenuOne or a Class 5 local switch. Santera-1 also includes a media gateway.

Tekelec will own 52 percent of Santera with the option to increase that to 62 percent or eventually to buy it outright. Tekelec is investing US$28 million and Santera US$12 million to fund the subsidiary.

Spokesmen for the company say this funding will carry Santera through until it is profitable.

David Heard, Santera CEO, will be president of the new subsidiary. It will be based in Plano, Texas, relatively close to a Tekelec facility in Richardson, Texas. Tekelec is based in Calabasas, Calif.

Tekelec President and CEO Fred Lax will be chairman of the subsidiary’s board of directors. Tekelec will hold a majority of seats on the board.

Internationally, the subsidiary, like its founding companies, will compete against Cisco Systems Inc. and UTStarcom Inc. Domestically, it will continue to compete against other softswitch vendors, including Sonus Networks Inc. and Taqua Inc., and traditional voice switch vendors Nortel Networks Corp. and Lucent Technologies Inc.

Products from the new subsidiary can be sold as systems that include signaling, switching and gateway hardware, or they can be sold separately and built into multivendor networks.

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