Sycamore Networks Acquires Eastern Research

Acquisition by Sycamore, for $92 million, is an attempt to upgrade its intelligent networking capabilities.

April 13, 2006

1 Min Read
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Optical networking provider Sycamore Networks said it will acquire network access solutions provider Eastern Research for $92 million in stock and cash in a move by Sycamore to upgrade its intelligent networking capabilities.

The complex deal calls for Eastern Research's parent company, Allen Organ Co., to spin off certain assets, paving the way for Sycamore to acquire Eastern Research, which had $62 million revenue in 2005. Sycamore will pay $8 million in cash and the rest in 17.8 million shares, according to an announcement Wednesday.

"The acquisition of Eastern Research is a first step towards leveraging our strengths in the core to offer a more comprehensive suite of solutions optimized for emerging broadband networks," said Sycamore's president and CEO Daniel Smith in a statement. "As wireless and wireline infrastructure networks evolve to support a broader mix of services and applications, network operators will require new levels of efficiency, agility, and scalability throughout their networks."

Eastern Research has about 250 employees, while Sycamore has about 260 employees, according to published reports. Sycamore had a headcount of about 1,000 at the height of the bubble.

In recent months Sycamore has reported increasing revenues; in its second quarter for fiscal 2006, reported in February, Sycamore said its revenue jumped to $20.8 million from $14.9 million in the same period in the previous year.

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