Feeds

Ericsson buys Redback to challenge Cisco

Sound and vision

Maximizing your infrastructure through virtualization

Ericsson has agreed to buy multi-service router firm Redback Networks for around $1.9bn in cash.

The deal, announced Wednesday, values Redback's stock at $25 per share, a tidy 60 per cent premium on its average price over the last three months, and is expected to close in February 2007, subject to the approval of Redback's shareholders and regulators.

Redback makes a range of IP routers, many designed for the edge of service provider networks, in competition with networking giant Cisco and others such as Juniper Networks. Ericsson said acquiring Redback would expand its IP market presence and growth opportunities. It specialises in technology designed to help service providers deliver internet broadband, voice and video service to their customers by taking advantage of newer IP technologies instead of more traditional ATM-based infrastructure.

"The combination of Redback's intelligent routing technology and our leading IMS (IP Multimedia Subsystem), optical transport and broadband access puts Ericsson in a leading position with end-to-end IP solutions for both fixed and mobile operators," Ericsson president and chief executive Carl-Henric Svanberg said. "The pace of IP deployment is accelerating as operators move to all-IP converged networks, in which quality of service requires increasingly intelligent routers with higher capacity."

Redback was founded in 1996 and boasts 700 carrier customers in more than 80 countries. It employs about 800 people, including 500 research and development engineers. Its sales grew 33 per cent in 2005 and 87 per cent for the first nine months of 2006 to reach $197m. Post acquisition, Redback will become a wholly owned subsidiary of Ericsson, based in its existing offices in San Jose and elsewhere. ®

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
VVOL update: Are any vendors NOT leaping into bed with VMware?
It's not yet been released but everyone thinks it's the dog's danglies
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.