Altamar Buys a Bargain

BALTIMORE – NFOEC – Altamar Networks is planning to announce the results of a highly successful shopping trip to England at the NFOEC tomorrow.

The company, a spinoff of Ditech Communications Corp. (Nasdaq: DITC; Frankfurt: BDTH), has sewn up a deal that will fill out its product porfolio with some ultra-long-haul transmission technology and an all-optical switch.

And the price? "Less than $1 million," according to Ian Wright, Altamar's CTO and senior VP of engineering (see Ian Wright, from Cisco to Ditech).

That's how much Altamar is paying for the intellectual property and other assets of Ilotron Ltd., a U.K. startup that failed to secure a second round of financing and was forced to call in an administrator on June 1 (see Ilotron Hits Hard Times).

Wright has also hired the whole of Ilotron's engineering team, some 25 people. They will continue work on Ilotron's ultra-long-haul transmission equipment and optical switch, forming a U.K. office of Altamar.

There's little doubt that this is quite a bargain for Altamar, not just because the price is so low but also because Altamar and Ilotron have complementary technologies. Ilotron's developments are also fairly well advanced. Its switch was already in lab trials with British Telecom (BT) (NYSE: BTY). Its ultra-long-haul transmission equipment is also thought to be in trials, although none has been officially announced.

Here are the details: Altamar is developing a grooming switch that will compete with the likes of the CoreDirector from Ciena Corp. (Nasdaq: CIEN), except that it aims to have a far higher capacity (see Altamar Unveils High-Density Switch).

Ilotron, on the other hand, was developing an all-optical switch based on MEMS (micro-electro-mechanical system) modules from OMM Inc., which dovetails with ultra-long-haul transmission technology it's also developing. In some respects, this put its products on a par with those of Corvis Corp. (Nasdaq: CORV), although they don't quite have the same "all-optical" credentials (see Corvis Gets Some Competition).

Combining these products will enable Altamar to offer optical add/drop mux capabilities, according to Wright. In other words, traffic that's whizzing straight through a node will stay optical all the way through, on Ilotron equipment. Traffic that needs to be dropped off locally can be shunted into Altamar's box, where it can be sliced and diced into smaller connections. This is similar to what Corvis is aiming to do with its addition of a grooming switch to its all-optical developments (see Corvis Goes Electric).

Wright says he had to move fast to rescue some of the remains of Ilotron. "We wouldn't have been able to do it unless I'd read Light Reading," he says.

This isn't the first time that Altamar has managed to cash in on startups in trouble. It acquired Atmosphere, a struggling metro equipment startup, just over a year ago at what was then considered a fire-sale price: $88.5 million in stock and $10.5 million in cash. Its Ilotron coup puts that in the shade.

— Peter Heywood, Founding Editor, Light Reading
http://www.lightreading.com For more information on NFOEC, please visit the Light Reading NFOEC Site.