Lucent Acquiring Internet Phone Provider Telica

Lucent Technologies has agreed to buy Telica, a privately held Internet phone service provider, for about $295 million in stock and options, the telecommunications giant announced Monday.

May 24, 2004

2 Min Read
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Murray Hill, N. J. (AP) -- Lucent Technologies has agreed to buy Telica, a privately held Internet phone service provider, for about $295 million in stock and options, the telecommunications giant announced Monday.

The acquisition of Marlboro, Mass.-based Telica is expected to strengthen Lucent's Accelerate portfolio, which helps service providers deliver voice, data and multimedia services, such as streaming video, to subscribers over wireless and wireline networks.

Lucent also expects the deal to bolster its ability to bridge next-generation and existing networks for its wireline and wireless customers.

Marketed under the PLUS brand name, Telica products include Plexus 9000 Media Gateway, PLUS Signaling Gateway and PLUS Media Gateway Controller. The products will be marketed and sold under Lucent's Accelerate portfolio.

"With market conditions stabilizing, we felt the time was right to make this strategic acquisition to complement our internal development at Bell Labs," said Bill O'Shea, Lucent's executive vice president of corporate strategy and business development.John St. Amand, Telica's founder and CEO, said Telica has deployed more than 3 million ports and supported about 4 billion minutes of use per month on its systems.

St. Amand will remain with Lucent and oversee Telica as it becomes part of Lucent's integrated network solutions business.

Terms of the deal call for Lucent to exchange 92.7 million shares of common stock and options for all of Telica's equity. At Friday's closing Lucent price of $3.19 a share, that would be worth $296 million.

In morning trading on the New York Stock Exchange, Lucent shares were up 5 cents at $3.24.The transaction, expected to close during Lucent's fourth fiscal quarter of 2004, is subject to regulatory approvals.

The purchase may result in a one-time charge against earnings for research and development, which would be taken in the quarter in which the deal is completed, Lucent said.Lucent also said the acquisition could dilute fiscal 2005 per-share earnings by 1 to 2 cents, while having a neutral to slightly beneficial effect in the following fiscal year.

Telica has about 250 employees worldwide, with the vast majority at its headquarters in Massachusetts.

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