BOSTON (07/25/2000) - Telecommunications equipment maker Lucent Technologies Inc. will buy Spring Tide Networks Inc., a Massachusetts-based network switching equipment company, for US$1.3 billion in stock, the companies said in a statement issued Tuesday.
Privately held Spring Tide will be purchased with 26.8 million shares and options, valued at about $1.3 billion, based on Monday's closing price for Lucent shares, according to the company. The transaction excludes the 4 percent of Spring Tide that Lucent already owns.
Lucent expects to close the deal by September 30, accounting for it as a purchase and taking a one-time charge against earnings for an accounting write-off assigned to in-process research and development. Lucent also expects the purchase to dilute its pro forma earnings by one cent a share in fiscal year 2001.
Six days ago, Lucent earned a $250 million, two-year contract to build and maintain AT&T Corp.'s voice and data infrastructure in its new fixed wireless broadband network. Main components of the nodes used in the network infrastructure include Spring Tide's IP Service Switch 5000, which Lucent offers through an OEM (original equipment manufacturer) agreement with the company. The switch provides IP (Internet protocol) and subscriber management functions, as well as other services. [See "AT&T Picks Lucent for Broadband Wireless Network," July 19.]"Spring Tide's equipment allows service providers to offer IP services more easily, things like virtual private networks and firewalls," said Debbie Lewis, a Lucent spokesperson. "It sits pretty seamlessly with our product line. It sits between our access product and our core switching products. We've had an OEM relationship with them since December of '99, so it's kind of an evolution, the next stage in the relationship."
Lucent Technologies, based in Murray Hill, New Jersey, can be reached at +1-908-582-5800 or on the Internet at http://www.lucent.com/. Spring Tide Networks, in Maynard, Massachusetts, can be reached at +1-978-298-2000 or on the Internet at http://www.springtidenetworks.com/.