Ericsson Buys Redback

STOCKHOLM -- Ericsson (NASDAQ:ERIC) and Redback Networks Inc. (NASDAQ:RBAK) have today announced that they have signed a definitive agreement under which Ericsson will acquire Redback for USD 25.00 per share, or an aggregate price of approximately USD 1.9 billion. The offer represents a premium of 60 percent to Redback's [90-day] volume weighted average stock price.

Redback was founded 1996 in San Jose, CA, the heart of Silicon Valley and listed on NASDAQ in 1998. Redback has over 700 carrier customers in more than 80 countries and employs about 800 people, including 500 R&D engineers. Fifteen of the top 20 telephone carriers worldwide use Redback's technology, including broadband routers to manage IP-based data, voice and video services.

Redback has a strong position in multi-service edge routing technology, which helps carriers deliver broadband, telephone, TV and mobility services over internet-based infrastructures. The company grew sales 33 percent for full year 2005 and 87 percent for the first nine months of 2006 to USD 197 m.

Carl-Henric Svanberg, president and CEO, Ericsson, says: "The combined strengths of both companies will create significant value for customers and shareholders and exciting opportunities for employees. The pace of IP deployment is accelerating as operators move to all-IP converged networks, in which quality of service requires increasingly intelligent routers with higher capacity."

Ericsson AB (Nasdaq: ERIC)