Nortel Takes Tasman for $100M

Pays $100M for security-focused company that sells routers that compete primarily with Cisco's low end

December 27, 2005

1 Min Read
Nortel Takes Tasman for $100M

Nortel Networks Ltd. will pay U.S. $99.5 million in cash for Tasman Networks Inc. , the companies announced this morning. (See Nortel Acquires Tasman.)

Nortel officials said that Tasman will be used to build its IP telephony and multimedia networking product lines, with a focus on enterprise networks. The routing technology will be used to support applications that include VPNs, firewalls, and quality of service.

Nortel officials expect the acquisition to close in the first quarter of 2006.

Tasman had been focusing on security and targeting low-speed edge interfaces such as T1 and DS3, competing primarily with low-end Cisco products in the 1700 to the 3700 range. Its biggest name carrier customer to date had been MCI LLC .

Tasman was founded in 1997, so calling it a startup might be a bit of a stretch. Over the years, it's undergone strategy shifts, a name change (it was formerly known as Tiara Networks), and more than six rounds of funding. (See Tasman: Lucky Seventh Round?.) The company took in more than $90 million in funding and went through several restarts, so it's unlikely the deal will be seen as a homerun for investors.

— R. Scott Raynovich, Editor in Chief, Light Reading

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