Lucent Technologies said it will acquire Spring Tide Networks, a leader in network switching equipment that allows service providers to offer customers a broad portfolio of Internet Protocol (IP) services such as virtual private networks (VPNs) and other applications.
Lucent will acquire Spring Tide Networks, of Maynard, MA, a privately held company, in a stock transaction for approximately 26.8 million shares and options, valued at about $1.3 billion, based on the closing price of $50.13 for Lucent stock on July 24, 2000. This excludes the approximately 4 percent stake in Spring Tide that Lucent already owns.
Lucent expects the acquisition of Spring Tide, which will be accounted for as a purchase, to be completed by September 30, 2000. The purchase is expected to result in a one-time charge against earnings for an accounting write-off assigned to in-process research and development, which will be taken in the quarter in which the acquisition is completed. The acquisition is expected to dilute Lucent’s pro forma earnings per share for continuing operations by about one cent in fiscal 2001.
Upside Magazine recently selected Spring Tide as one of its ‘Hot 100’ private technology companies. The selection criteria included technological achievements, customer acceptance of product and services, financial performance and management savvy.
In December 1999, Lucent and Spring Tide entered into a worldwide original equipment manufacturer (OEM) agreement. As a result of the relationship, Lucent has secured contracts for the IP Service Switch 5000 with several customers including AT&T Wireless and ionex telecommunications.