Bay Networks has signed an agreement to acquire Rapid City Communications, a gigabit Ethernet and routing firm, in a deal worth $155 million.
As predicted last week in PC Dealer (18 June), Bay has bought Rapid to plug a hole in its portfolio, by gaining easy access to to the company?s gigabit Ethernet technology. Bay will pay for the acquisition by issuing Bay stock in exchange for all of the shares in Rapid.
Joe Kennedy, CEO at Rapid, will become a vice president at Bay, reporting to Lloyd Carney, executive VP of Bay?s enterprise business group.
Rapid will be absorbed into the enterprise business group, and Kennedy will take responsiblity for all staff that move over to Bay. The sales staff will be integrated with Bay?s sales team. No redundancies among the 52 employees are expected as a result of the acquisition.
David House, Bay CEO, said the deal would strengthen its presence in the gigabit Ethernet market, which he claimed will be worth $1 billion dollars by 2000.
The first Bay-backed products are expected to ship in limited quantities in the fourth quarter of this year.
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