The bubble-era veteran brings Xtera some metro WDM help and a possible 'in' with the PBT crowd

Craig Matsumoto, Editor-in-Chief, Light Reading

April 7, 2008

2 Min Read
Meriton Lands in Xtera's Hands

Long-haul optical equipment vendor Xtera Communications Inc. (Nasdaq: XCOM) may be readying a push into new markets now that it's acquired Meriton Networks Inc. .

Xtera announced the deal in the first minutes of Monday morning. But Meriton's neighbors got to spend all weekend gossiping about it after someone leaked details to the Ottawa Citizen. (See Xtera Acquires Meriton and Xtera Buys Meriton.)

Terms of the deal were not disclosed, but Meriton almost certainly did not recoup the more than $200 million in venture money it's raised since 2000. The most recent chunk of that came in 2005; the most sizable, at $110 million, came back in 2001. (See Meriton Raises $54M, Finds Good Company and Xtera's Long-Haul Regeneration.)

It would be easy to say Meriton adds a metro angle to the long-haul and subsea DWDM gear Xtera is best known for. But last year, Meriton also took an interest in Provider Backbone Bridging -- Traffic Engineering (PBB-TE, a.k.a. PBT), the technology that's caught the eye of BT Group plc (NYSE: BT; London: BTA). Xtera might see a chance to crack into an attention-getting market that's outside its boundaries. (See Meriton Tackles Ethernet Transport and A Guide to PBT/PBB-TE.)

Xtera's purchase continues a gradual consolidation among the second-tier optical equipment providers. Meriton had bought Mahi Networks in 2005, and Mahi had bought what was left of Photuris prior to that. (See Meriton Buys Mahi Networks and Mahi Nabs $70M, Photuris Assets.)

Meriton is Xtera's second purchase recently, as the company glommed onto subsea specialist Azea Networks in November. (See Xtera Buys Azea.)

Combined, Xtera and Meriton employ about 110, with 40 of those stationed in Ottawa. Another 35, mostly in Kanata, Ontario, were laid off, the Citizen reported.

Xtera's release didn't discuss what will happen to the companies' executive ranks, but the Citizen reports that Mike Pascoe, Meriton's CEO since 2005, won't be joining Xtera. (See Headcount: Vendor Vivisection.)

— Craig Matsumoto, West Coast Editor, Light Reading

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Interested in learning more on this topic? Then come to Optical Expo 2008, a conference and expositon showcasing the leading suppliers and service providers in the optical industry. To be staged in Dallas, October 6-7, admission is free for attendees meeting our prequalification criteria. For more information, or to register, click here.

About the Author(s)

Craig Matsumoto

Editor-in-Chief, Light Reading

Yes, THAT Craig Matsumoto – who used to be at Light Reading from 2002 until 2013 and then went away and did other stuff and now HE'S BACK! As Editor-in-Chief. Go Craig!!

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