Israeli Group Buys Laurel Networks For $88 million

LONDON — Israeli telecom equipment supplier ECI Telecom has acquired Edge router and broadband remote access server specialist Laurel Networks for $88 million in cash.

ECI said earlier this year it intends to grow through acquisitions, hence, other deals are expected over the next 12 months.

Pittsburgh-based Laurel specializes in IP/MPLS multiservice Edge routers that will extend ECI's broadband, optical and core routing portfolio, enabling it to enhance its systems functionally and create complete multiservice IP solutions for service providers.

Laurel recently refocused its efforts on the video-enabled networks market, which is growing fast, especially in Europe.

Laurel was founded in 1999. It has since attracted $118 million in venture capital financing from leading U.S. funds, including NEA & Trinity Ventures and Ciena Corp. Most of the funding was used for the development of its multiservice Edge routers.ECI said the deal is subject to usual closing conditions, but suggested it could be completed within weeks. On completion, Laurel would become part of ECI's data networking division.

ECI did not say how many of Laurel's 150 employees would be retained. The company, whose customers include Korea Telecom, Dacom and Level 3, also had $9 million in cash.

"Carriers' infrastructure and services are rapidly evolving to IP," Doron Inbar, president and CEO of ECI, said in a statement. "By acquiring Laurel we add best-of-breed IP Edge routing products, technology and expertise to our overall portfolio of IP solutions and strengthen ECI's position as a supplier of next-generation IP solutions."

Erik Keith, senior analyst with Current Analysis, commented: The deal "brings together two highly complementary solution sets, with Laurel's well-regarded IP/MPLS edge routing technology effectively filling one of the few gaps in ECI's already robust portfolio of market-proven broadband access and optical technologies."

Keith added that the acquisition also establishes a beachhead for ECI in the North American market, and that Laurel's recently introduced IP Video Router "is a congruent fit with ECI's existing Hi-FOCuS solution set, which has already been deployed in multiple, large-scale triple-play service deployments in Europe and Asia."0