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Ericsson Buys Redback for $2.1 BillionPOSTED December 21, 2006 SAN JOSE -- Redback Networks, a leader in multi-service edge routing for broadband networks, agreed tto be acquired by Ericsson, the world's leading telecommunications supplier, for $2.1 billion or $25 dollars per Redback share. The acquisition is subject to customary closing conditions and regulatory approvals, and is expected to be completed in early 2007. The acquisition of Redback will play a key role in Ericsson's strategy to help telecommunications carriers lower costs and upgrade their networks for broadband, telephone, video and mobility services. Redback will retain its management team and operate as a wholly-owned subsidiary of Ericsson. In accordance with the acquisition, Redback plans to accelerate its product development and continue to expand its operations to meet growing customer demands for next generation broadband networks. Redback will continue to focus on video and mobility routing markets to leap-frog its traditional competitors. "This agreement is about accelerating market growth, integrating IP routing and mobility expertise and shaping the future of next generation networks. Video changes everything about networks today. Redback is the acknowledged technology leader delivering broadband, phone, video and mobility services over Internet-based infrastructures," said Kevin DeNuccio, Redback president and CEO, who will report directly to a management board chaired by the president and CEO of Ericsson, Carl-Henric Svanberg. "We believe Redback now will have the global reach and financial resources to accelerate its own routing technology innovation and grow market share faster than our traditional routing competitors." "Redback has always had a well-known technology advantage over its larger routing competitors in broadband services edge routing," said Carl-Henric Svanberg of Ericsson. "We believe the combined strengths of both companies in mobility and IP routing will create significant value for customers and shareholders. Today's agreement accelerates Ericsson's ambition to build leadership in the fast growing broadband and IP services market." The total addressable market for IP edge routing is expected to exceed $5 billion by 2009, according to the Yankee Group. Ericsson and Redback believe there is market opportunity to upgrade more than two billion wired and wireless users worldwide over the next ten years to all IP-based broadband infrastructures. This opportunity is ten times larger than the 250 million broadband users today. On a worldwide basis, all carriers have some plans to unify communications and entertainment services over IP-based broadband networks. Redback Networks has 724 employees and is based in San Jose. © Copyright SVDaily.com |
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