Business Briefs

SAN MATEO (03/24/2000) - Internet service provider PSINet Inc. last week said it has signed a definitive agreement to acquire IT services provider Metamor for approximately $1.9 billion. Texas-based Metamor has 4,500 employees in 70 offices and saw revenue of $577 million in 1999, PSINet officials said. Metamor will be "integrated" into PSINet, which will strengthen PSINet's ability to provide turnkey outsourced services that range from Web design to managed hosting, officials said. Under the terms of the agreement, each share of Metamor will be exchanged for 0.9 shares of PSINet common stock. The deal also gives PSINet a controlling interest in Xpedior, Metamor's e-business solutions subsidiary.

All patent-infringement lawsuits filed between Hewlett-Packard Co. and Xerox Corp. have been resolved, the companies announced.

To avoid the "costs, time, and distractions of lengthy legal battles," both HP and Xerox have agreed to drop all lawsuits filed against each other and not to disclose any further terms of the "amicable" and "mutually satisfactory" agreement, the companies said in a statement.

Xerox originally filed a lawsuit in May 1998 accusing HP of using patented Xerox technology in some of its ink-jet printers. The lawsuit was followed by numerous countersuits, motions, and court rulings.

The settlement between HP and Xerox included all six outstanding patent-related lawsuits that had been filed from May 1998 and June 1999, the companies said.

Separately, Xerox is pursuing a patent infringement case against 3Com, alleging that Xerox owns the handwriting recognition software used in 3Com's Palm devices.

Nortel Networks Corp. is acquiring CoreTek, a privately held maker of optical components, for up to $1.43 billion in Nortel common stock, officials from both companies said.

CoreTek makes tunable lasers and other components that will help Nortel in its push to build an all-optical Internet, and will complement companies Nortel has acquired as well as other technologies in the works, a Nortel official said.

CoreTek uses VCSEL (Vertical Cavity Surface Emitting Laser) and MEMs (MicroElectroMechanical Systems) technology in its products. The products use tiny mirrors that move to change the wavelength of light emitted from both semiconductor lasers and other optical components.

The company's next-generation devices will let networks change light wavelengths in real time as they travel through the network so that traffic can be monitored and rerouted, according to the companies. The result is improved speed and performance as well as lower costs for network vendors.

Nortel was attracted to CoreTek because its products offer a range of advantages, including shorter switching times, and because Nortel officials have deemed CoreTek's line "the absolute best of breed of second-generation tunable laser." CoreTek plans to ship its next generation of components in the fourth quarter of this year.

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More about 3Com AustraliaCoreTekHewlett-Packard AustraliaNortel NetworksPSINetXeroxXpedior

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