Alcatel to buy Assured, launch IP division

Alcatel SA yesterday said it would acquire Assured Access Technology, which will be one cornerstone of a new Internet division devoted to the IP (Internet protocol) market.

The French telecommunications equipment vendor agreed to purchase Assured, a Milpitas, California-based manufacturer of remote access products for the IP carrier market, for an implied value of $US350 million, according to Alcatel officials.

The purchase of Assured will enhance Alcatel's IP public networking capabilities, particularly in the US, the company said. The actual cost of the acquisition is about $285 million, according to Niall Hickey, an Alcatel spokesman, with the remainder set aside as the maximum cost of a technology incentive program which Alcatel is implementing with Assured.

Martin de Prycker, also head of Alcatel's Internet division, will become chairman of Assured, which will retain its name. Assured's founder, Arthur Klein, will remain chief executive officer. The deal is subject to approval by shareholders, and is expected to be finalised within two weeks, Alcatel said.

Assured will be part of a newly-created Internet division at Alcatel. The new division will also consist of several existing Alcatel business units, and will also include Packet Engines, a Spokane, Washington-based routing switch maker which Alcatel purchased in October 1998, Alcatel said.

The main purpose of the new division will be to provide the burgeoning market of new telcos and Internet service providers (ISPs) with products and services that allow them to connect their customers to the Internet, Alcatel said. The division, which will have some 850 employees, will also serve as a centre of IP (Internet protocol) expertise within Alcatel. The Internet division will have a common sales, marketing and customer service team, but will be split into different business units, each focusing on their market requirements and products.

Alcatel is reorganising its activities to split into groups which serve three broad market segments; the carrier market, the enterprise market and the market for established operators that need to integrate voice and data, Alcatel said. Alcatel's chief executive officer discussed the move to the new divisions and hinted very strongly of future purchases on Monday while talking with journalists in Paris in conjunction with the purchase of Xylan Corp. But the data networking vendor will belong to Alcatel's enterprise division rather than its new Internet group, Alcatel's Hickey said.

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