Lucent to Buy LANNET for $117 Million

Lucent Technologies said today it will acquire Ethernet and ATM switching solutions provider LANNET for $117 million in a move designed to further expand its data networking business.

The companies expect the purchase to be finalized by Sept. 30 of this year.

A subsidiary of Madge Networks N.V., Israel-based LANNET provides next-generation Ethernet intelligent switches for local area networks (LANs) and high-capacity Asynchronous Transfer Mode (ATM) technology for campus backbone networks.

The LANNET product line features Visage enterprise stackable switches for workgroup and backbone applications, and Meritage 1400 multiservice Ethernet and ATM backbone switches. In addition the company also retails LANswitch Plus, a multilayer, multiprotocol (Ethernet, Token Ring, FDDI) switching system.

“This acquisition helps fill an important space in our growing data networking portfolio,” said Bill O’Shea, president of Lucent’s Data Networking Systems group. “The intelligent LAN switch opportunity is growing at better than 20% a year and this move will help us offer a comprehensive Lucent LAN switching solution from the desktop to the edge of the wide area network.

“These products are highly complementary to Lucent’s data networking product line,” added O’Shea. “There are essentially no product overlaps in this deal.”

Lucent said it expects the acquisition to produce a one-time, non-cash charge against earnings. The charge includes an accounting write-off and will be taken in the quarter ending Sept. 30, 1998.

Once the transaction is completed, LANNET will be integrated into Lucent’s Enterprise Infrastructure Products Group (EIPG) within Data Networking Systems. LANNET’s CEO, Shmuel Levy, has been named president, EIPG Israel Technology Center. The company’s main operation center will remain in Israel.

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