Alcatel Buys Native Networks

After a successful partnership, telecom equipment giant Alcatel is acquiring transport specialist Native Networks for $55 million
in cash, the companies announced today.

The buy enhances Alcatel’s ability to help large service providers deliver the
so-called triple play of voice, data and video services over a single
network platform.

Laurel Bowden, a general partner at Jerusalem Venture Partners, Native
Networks’ largest stakeholder, said the company’s research and development
group was a key selling point.

“The other advantage [for Alcatel] is that Native products can not be
offered or combined with any other major equipment provider,” Bowden told

Alcatel officials weren’t immediately available for comment. In a statement,
Romano Valussi, president of Alcatel’s optical networking activities, said,
“We are strengthening our value proposition and increasing our ability to
address multi-service market requirements with innovative solutions.”

The purchase comes two years after the companies signed a technology
development partnership that resulted in an add-on to Alcatel’s optical
equipment line. Carriers in several countries are currently using the
combined offering, Bowden said.

For six-year-old Native Networks, the move vastly expands its ability to
distribute its technology. The privately held, venture-backed company is
based in Maidenhead, United Kingdom, and has a research hub in Petah Tikva,

“Most employees will be staying
with Alcatel and many key employees in Native will take on senior positions
within Alcatel,” Bowden said.

Native Networks has more than 50 employees.

By comparison, Paris-based Alcatel has operations in more than 130 countries
and has a long list of carrier, ISP and enterprise customers.

The company is no stranger to strategic acquisitions. Last year, it paid a total of $277 million in cash and stock for Spatial Wireless and eDial. The
purchases helped Alcatel add equipment for mobile networking and
conferencing, respectively.

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