RealTime IT News

Nortel Acquires Alteon for 7.8 Billion

Nortel Networks has concluded a definitive agreement to acquire San Jose, California- based Alteon WebSystems, a provider of content aware switching.

Nortel will pay an estimated US $7.8 billion in its common shares for Alteon WebSystems on a fully diluted treasury stock basis.

Alteon WebSystems will become a wholly owned subsidiary of Nortel Networks.

The acquisition will enable Nortel Networks to build the next generation Internet data center -- capable of delivering content at unprecedented levels of speed, efficiency, and reliability.

By integrating Alteon WebSystems' content aware switching products with its own service offerings in storage, gigabit switches, professional services, hosted application management, delivery, and caching, Nortel Networks can offer a complete Internet data center solution.

"The value and richness of content across the Internet is increasing on a massive scale," said Clarence Chandran, Nortel's Chief Operating Officer. "Our acquisition will accelerate the delivery of an Internet data center capable of moving content seamlessly and rapidly across high-performance optical, Internet, and 3G wireless networks."

With its massively distributed architecture, robust software capabilities, marquee customer base, deep market penetration, and dramatic revenue growth ($51.5 million for Q2/2000 -- an increase of 82 percent from Q1), Alteon has emerged as a strong player in the expanding market for content switching.

International Data Corporation (IDC) forecasts this market to grow to over $4 billion by 2004 from $203 million in 1999.

Founded in 1996, Alteon WebSystems employs a staff of approximately 500 around the world and is publicly traded on the Nasdaq Stock Market under the symbol ATON.

Its client base includes Yahoo!, Excite@Home, Buy.com, NTT, DLJDirect, CitySearch-Ticketmaster Online, Digex, ISPs UUNet, Cable & Wireless, Virgin, Global Crossing, ICG Communications, GTE Internet, Concentric Networks, and Microsoft WebTV.