Light Reading

Tellabs CEO Kelly Out as Brand Goes Bye-Bye

Dan Jones
1/31/2014
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Tellabs CEO Dan Kelly is on his way out as Marlin Equity moves ahead with its plans to merge its Tellabs and Coriant businesses under the Coriant brand.

Marlin Equity Partners said in a press release this week that Kelly has stepped down as chairman and CEO of Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) but will take an advisory role during the transition. (See Tellabs Delivers Final Earnings Fizzle.)

Marlin closed its acquisition of the troubled optical equipment vendor Tellabs for $891 million in December. Marlin, an emerging optical powerhouse, had been expected to roll some or all of the Tellabs assets into Coriant. (See Tellabs' Last Hope: Marlin's Optical Ambition and Tellabs to Be Sold to Marlin for $891M.)

In February of last year, Marlin created Coriant by combining optical units from Sycamore and NSN. (See Sycamore + NSN Optical = Coriant.)

A Light Reading regular, brookseven, even predicted on our message board in December that the Tellabs CEO was on the way out. "I expect Dan... to be gone within 90 days." (See Tellabs: To Be Continued.)

Marlin has appointed Bob Leggett as chairman of the board, Pat DiPietro as CEO, and Herbert Merz as president and chief operating officer of the unified organization. It has also said that it will establish an independent business for the Tellabs Access product portfolio.

The PE firm hasn't specified how long combining the two optical units will take.

— Dan Jones, Mobile Editor, Light Reading

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DanJones
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DanJones,
User Rank: Blogger
2/1/2014 | 3:23:47 PM
Re: Pat DiPietro?
Everything read up on when I was writing this story suggested that optical LAN was a slow sell cycle even if it was steady. Not the kind of thing to get financial analysts excited, generally speaking.
DOShea
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DOShea,
User Rank: Blogger
2/1/2014 | 10:56:31 AM
Re: Pat DiPietro?
Ok, I'm placing my bets on Seattle and Calix then... The Tellabs guys really tried to brag on the optical LAN stuff quite a bit, though it never seemed to impress the financial analysts who followed them. Maybe Coriant sees something there despite other LAN tech options?
brookseven
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brookseven,
User Rank: Light Sabre
2/1/2014 | 1:19:12 AM
Re: Pat DiPietro?
 

As a NY Giants fan (I grew up in Upstate NY), I want the Seachickens to win.  Gotta love Eli at 2 with Peyton at 1.  But I somehow think it will be Peyton as I think Russell Wilson's inexperience will be the difference.

As to a plan, it would seem to me that Coriant could cut the current structure to profitability and invest in some new technology.  Between the fNSN and fTellabs there has to be lots of overlap.

As an extra notion, I heard the Optical LAN Access product is staying with Coriant.  Either way, I will bet they will sell the fAFC product.  Calix is the natural buyer as it would make them a vendor to Tier 1 telcos.

seven

 

 
DOShea
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DOShea,
User Rank: Blogger
1/31/2014 | 9:34:30 PM
Re: Pat DiPietro?
Good call. Who do you like in the Super Bowl? (Though maybe it's too soon to ask after the 49ers just missed...)
DOShea
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DOShea,
User Rank: Blogger
1/31/2014 | 9:32:37 PM
Re: Pat DiPietro?
Maybe they have one eye on an IPO. They have been getting some decent 100G wins of late--TeliaSonera and others. DiPietro is not necessarily the first person you would think of for this job even though he does have relevant experience. Maybe he was the one pushing Marlin's money in this direction.
DanJones
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DanJones,
User Rank: Blogger
1/31/2014 | 7:35:26 PM
Re: Pat DiPietro?
Marlin's long-term game plan isn't obvious to me. Is Coriant some kind of optical Borg that swallows up the reminants of dead or dying optical firms now? Aren't really that many left are there?
brookseven
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brookseven,
User Rank: Light Sabre
1/31/2014 | 7:10:11 PM
Re: Pat DiPietro?
 

So, score one for the old guy from Petaluma.  Which is too bad, because Dan Kelly is a really nice man. 

 

seven

 
DanJones
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DanJones,
User Rank: Blogger
1/31/2014 | 6:00:17 PM
Pat DiPietro?
Pat DiPetro was VP of 3G Systems at Nortel way back when. He's been on optical and wireless boards through PE firms since about about 2001 though.
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