Feeds

Ericsson buys Redback to challenge Cisco

Sound and vision

Combat fraud and increase customer satisfaction

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. ®

Combat fraud and increase customer satisfaction

More from The Register

next story
This time it's 'Personal': new Office 365 sub covers just two devices
Redmond also brings Office into Google's back yard
Kingston DataTraveler MicroDuo: Turn your phone into a 72GB beast
USB-usiness in the front, micro-USB party in the back
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
BOFH: Oh DO tell us what you think. *CLICK*
$%%&amp Oh dear, we've been cut *CLICK* Well hello *CLICK* You're breaking up...
AMD's 'Seattle' 64-bit ARM server chips now sampling, set to launch in late 2014
But they won't appear in SeaMicro Fabric Compute Systems anytime soon
Amazon reveals its Google-killing 'R3' server instances
A mega-memory instance that never forgets
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.