Lucent to Buy Broadsoft?

Incumbent equipment provider may not be done shopping in the VOIP software space

June 22, 2004

2 Min Read
Lucent to Buy Broadsoft?

CHICAGO – Supercomm 2004 – The rumor spreading like wildfire across the Supercomm show floor today has Lucent Technologies Inc. (NYSE: LU) taking a hard look at acquiring BroadSoft Inc.

According to several sources, the talks are serious, and at least one source in the investment banking community says a deal could be in the works this week.

One source in the VOIP product market says talk of such a deal have been rife in recent weeks, and that a range of prices between $20 million and $200 million has been rumored.

Neither Lucent nor Broadsoft would comment on the matter, saying only that they have a strong ongoing partnership.

Lucent is just coming off the acquisition of Telica Inc., for which it paid $295 million (see Lucent Buys Softswitch Vendor Telica). That deal is scheduled to close in July.

Telica makes a softswitch, or packet-based voice gateway. Broadsoft makes a "features server," a product that's complementary to a softwitch such as Telica's. A features server allows carriers to deploy packet-based voice services such as IP Centrex .

The feature server market isn't filled with a large number of competitors. The other widely recognized competitors to Broadsoft are Sylantro Systems Corp. and VocalData Inc.

Telica VP of marketing Jim Lane says he doesn't know whether Lucent is looking at Broadsoft, but he says Telica had had an interest in the features server market -- and VocalData in particular -- prior to being acquired by Lucent. But he said Broadsoft is considered by many to be the leader of the pack. Telica partners with Broadsoft, Sylantro, and VocalData.

"Broadsoft appears to be the market favorite -- they have a lot of traction," says Lane.

Infonetics Research Inc. analyst Kevin Mitchell says it would make sense for Lucent to make such an acquisition, and that "it wouldn't make much sense for Lucent to buy another company seeing as how they're selling Broadsoft's products."

— R. Scott Raynovich, US Editor, Light Reading, and Ray Le Maistre, International Editor, Boardwatch

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