Nortel to Acquire Software Maker

FRAMINGHAM (04/20/2000) - Nortel Networks announced Wednesday that it will acquire Architel Systems, a developer of software that lets service providers provide Internet and other IP services, for US$395 million in stock.

Architel's software will expand Nortel's Preside Internet application development environment. Preside enables applications such as virtual private networks (VPN) or eBusiness Web sites to work across any connection medium -- optical, cable, wireless or digital subscriber line, Nortel says.

Architel's software will automate the service provisioning process of Preside, enabling service providers to provision and activate services for individual customers in minutes, instead of the weeks or months it takes in many networks, Nortel says.

Architel was founded in 1984 and is headquartered in Toronto. It has about 400 employees. Its customers include Cable & Wireless, MCI WorldCom, British Telecom, GTE and McLeodUSA.

The transaction is expected to close early in the third quarter of 2000. If the transaction fails to proceed in certain circumstances, Nortel says it will be entitled to receive either a $12 million termination fee or the option to acquire a 19.9% interest in Architel.

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