The acquisition of Ascend by Lucent has put a premium on thetinue, following Lucent's acquisition of Ascend. remaining Wan vendors as consolidation carves up the IT industry.
Many analysts have listed ATM switching vendors, Newbridge Networks and Fore Systems, as the next companies to be swallowed.
Paul Silverstein, senior communications equipment analyst at Banc Boston Robertson Stephens, said: 'I don't see Newbridge being taken up over the next 30 to 60 days, but there is a fair chance that one of Lucent's competitors, Ericsson or Siemens, may acquire it.'
He added: 'The company is preforming well and its core business is strong, which would, of course, make it attractive for a third party.'
Jim Slaby, Wan analyst at Giga Information, believes Newbridge is up for sale, even though the company's top executives may publicly claim otherwise. 'Alcatel and Newbridge would be a reasonable fit as Alcatel divests from its non-strategic business. It also has a reasonable presence in the US,' he said.
Newbridge recently fuelled purchase speculations by shedding three firms from its startup programme: remote access company ACC, sold to Ericsson; voiceover IP developer Vienna, now owned by Nokia; and fibre optic specialist Cambrian, currently part of Nortel. Observers speculated this was part of the company's plan to clear the decks of non-core interests, to make it attractive to buyers.
Chris Albinson, assistant vice president of the affiliate programme at Newbridge, said the startups are either sold, floated or purchased by the company. The three startups had matured and were sold off just as the industry approaches consolidation fever.
He pointed out: 'I'd be selling off startups that are one or two years old (if the rumours were true). It takes startups between four and seven years to reach exit point. The companies we sold were between four and six years old.'
Newbridge had invested $130 million in the scheme since it was created five years ago, taking a 30 per cent stake in each of the 23 companies involved. Albinson claimed that the sales had achieved a 56 per cent rate of return. 'A top-rate venture capitalist would see a 25 per cent rate of return,' he said.
Newbridge was due to float PCI to VME bus bridging chipset firm, Tundra, and recently acquired voiceover frame relay startup, Castleton. Albinson revealed that Newbridge was looking at signing up 10 more startups over the next decade.
FUTURE OF PRODUCTS IN THE BALANCE FOLLOWING MERGERS
The outlook of competing product families from Lucent and Ascend was still uncertain as the two firms evaluate the implications of their recent merger announcement.
According to Lucent, it will continue to support both companies' offerings, while their respective engineering teams discuss how to merge certain lines.
Prospective products for merger include remote access offerings from a former Lucent acquisition, Livingston Enterprises, and ATM tools from Yurie Systems.
A Lucent representative stated: 'Yurie's access products are offered as the Lucent Packetstar brand, which is a market leader in ATM.
If there are any Ascend products that overlap, we will continue to support them and look to merge their capabilities in the future.'
A similar fate is likely to befall the remote access products. Ascend markets MaxTNT, while Livingston sells Port Master.
But a Lucent representative insisted that there was a small overlap between the products. MaxTNT is targeted at large service providers, while Port Master is sold to small and medium-sized carriers. 'We will support both platforms, but will look towards developing another platform,' he said.
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