Ciena Corp. (NYSE: CIEN) has acquired some of the assets and intellectual property of PhyFlex Networks Inc. for an undisclosed sum, the companies confirmed today.

PhyFlex catered to the cable market, but Ciena plans to apply the acquired technology more broadly and leverage it for broadband access and wireless backhaul applications.

"This was not an asset purchase made as a means of getting deeper into the cable market," Ciena's spokeswoman said. She added that Ciena will also use the assets to address the needs of its cable MSO customers.

Ciena will pick up the bulk of PhyFlex's patents and products, including those tied to its out-of-band network architecture and switched Ethernet systems. Specific products covered include the FTTxSwitch, Coax Access Switch, Coax Demarcation Unit, specialized modems, Service Management Platform, and miniX, an Ethernet-over-coax media converter.

Westford, Mass.-based PhyFlex targeted its switched carrier Ethernet system to cable operators seeking entry to the lucrative business services market. Its marquee customer was Cablevision Systems Corp. (NYSE: CVC), which started off using the vendor's out-of-band system to deliver dedicated 50-Mbit/s data services to commercial customers in Oyster Bay, N.Y.

Rumors that PhyFlex, formerly known as Narad Networks, was seeking a sale go back more than two years. (See New Name for Narad.)

"While the timing of the market wasn't right for PhyFlex, the direction of the industry today points to success for Carrier Ethernet access network solutions in the years ahead," said PhyFlex CEO Michael Collette, in a statement. "We believe that Ciena's experience and success with carrier-grade optical Ethernet transport and next-generation network solutions makes it a natural fit for maximizing the switched Ethernet and other technologies we've developed," added Collette, who was at the helm of Ucentric Systems when the home media networking specialist was acquired by Motorola Inc. (NYSE: MOT) in early 2005.

PhyFlex raised more than $100 million since its founding in mid-2000. In February 2007, it secured a $10 million round to support global expansion and its newly developed switched Ethernet portfolio. (See Narad Bags $10M.)

Although the price of the asset deal was not disclosed, it appears Ciena didn't have to pay much for PhyFlex's technology.

The financial terms were "not material to Ciena's business," the Ciena spokeswoman said. Ciena also did not issue a press release about the PhyFlex agreement. [Ed. note: No need for that now, eh?]

Ciena announced it will not take on any PhyFlex employees as part of the asset deal but might be open to hiring some as new Ciena employees. PhyFlex declined to say how many employees it had at the time of the agreement.

— Jeff Baumgartner, Site Editor, Cable Digital News

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