Nokia Siemens to Acquire Atrica

The carrier Ethernet specialist finally finds a buyer, and, as expected, it's Nokia Siemens Networks

Craig Matsumoto, Editor-in-Chief, Light Reading

October 25, 2007

2 Min Read
Nokia Siemens to Acquire Atrica

The wait is over for Atrica Inc. , as Nokia Networks (NSN) announced this morning it's snapping up the carrier Ethernet specialist for an undisclosed sum.

Atrica's 180 employees and its executive team are expected to join NSN. The deal is expected to close before Jan. 1. (See NSN to Acquire Atrica.)

Last month, the Israeli news site Globes reported rumors of the matchup, assigning it a price tag of $100 million. NSN would not confirm that amount; Atrica officials were not immediately available for comment.

It's the first acquisition for Nokia Siemens, which had also been rumored to be on the hunt for Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA). (See Is Nokia Siemens Tailing Tellabs?)

For Atrica, the deal culminates a seven-year crusade in the name of carrier Ethernet.

Atrica picked up some early success with Orange (NYSE: FTE) and Deutsche Telekom AG (NYSE: DT). (See Atrica Plugs Into France Telecom, FT Heralds Ethernet Breakthrough, and Deutsche Telekom Tackles Ethernet.)

More recently, it's scored wins with carriers like Optimum Lightpath -- which doesn't have a network the size of France Telecom's but is a high-profile customer, given its intensive marketing push in the eastern United States. (See Atrica Finds Its Lightpath and HR Awards Top Ethernet Providers.)

But Atrica, with revenues recently estimated at $9 million to $10 million per quarter, never reached breakaway velocity for an IPO. Even a $100 million acquisition could be perceived as a letdown, considering Atrica raised $170 million in venture funding since being founded in 2000. (See Atrica Raises $28M More and Out of Atrica.)

NSN, meanwhile, is prizing the Tel Aviv-based engineering staff it's going to receive from Atrica. While NSN has its own Ethernet portfolio, it felt it needed some help when it comes to carrier-class gear.

"We're talking about a very immature market here. Carrier Ethernet is a market people have taken seriously for about two years," an NSN spokeswoman says. "Atrica has a product to complement ours. It just closed a gap in edge solutions."

Atrica sells carrier-class Ethernet gear, primarily for edge networks. Earlier this year, the company began offering customer-premises equipment as well. (See Atrica Intros Ethernet Demarc Device.)

— Craig Matsumoto, West Coast Editor, Light Reading

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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