Cable Tech

Motorola to Buy Quantum Bridge

Motorola Inc. (NYSE: MOT) announced this morning that it's reached an agreement with Quantum Bridge Communications Inc. to buy the passive optical networking startup for an undisclosed cash sum (see Motorola Acquires Quantum Bridge).

"Undisclosed" in this case probably means an embarrassingly small amount of money -- or, at least, a far cry from the valuations that Quantum Bridge had in mind way back in December 2000, when it filed for an IPO (see Quantum Bridge Aims for IPO). The IPO never happened, and Quantum Bridge, like many other startups, has been through a succession of layoffs since (see Quantum Bridge Withdraws IPO and PON Believers Hang Tough).

From Motorola's point of view, acquiring Quantum Bridge fits into an overall strategy of becoming a bigger player in broadband access markets. About a year ago, it acquired a VDSL equipment manufacturer, Next Level Communications, giving it a story for upgrading telco copper to handle broadband (see Motorola Buys Rest of Next Level, Moto's Next Level Offer to Expire, and Motorola Extends Next Level Offer).

Shortly after this, Quantum Bridge and Motorola announced that they had teamed up to target fiber-to-the-home (FTTH) projects (see Motorola, Quantum Bridge Team Up). Since then, the duo have won a number of contracts (see Motorola, Quantum Bridge Win FTTP Deal, NAED Picks Motorola, Quantum for FTTP, and Motorola, Quantum Bridge Do FTTP).

"We were part of the strategy, so there isn't a lot of redundancy in what they do and what we do," says Jeff Gwynne, senior VP of marketing and business development at Quantum Bridge. "It's a great fit with our telco presence."

Quantum Bridge will be absorbed into Motorola's Broadband Communications Sector (BCS) division. This division is already a leading player in other segments of the broadband services market, according to Motorola. This includes video headends, video set-top boxes, multiservice transport infrastructure, and cable modems. Motorola's broadband strategy also includes the manufacture of PON chips (see Motorola Joins BPON Craze).

Quantum Bridge and Motorola are still discussing how many of the startup's 70 staff will be transferred to Motorola's BCS, according to Gwynne.

Gwynne declines to say how much funding Quantum Bridge received in total, noting that recent rounds have gone unannounced. Four years ago, the company wasn't so bashful. It was basking in a third round of $102 million, which brought total funding to $124 million (see Quantum Bridge Raises $102 Million).

At the time, investors included Atlas Venture, BCI Partners Inc., Comcast Interactive Capital, Dain Rauscher Wessels, First Union Capital Partners, JP Morgan Capital Corp., KMC Investment Partners, Lazard Technology Partners, Morgan Stanley Dean Witter Private Equity, New Enterprise Associates (NEA), Pequot Capital Management Inc., and Texas Pacific Group.

— Peter Heywood, Founding Editor, Light Reading

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truelight 12/5/2012 | 2:08:51 AM
re: Motorola to Buy Quantum Bridge They will have a lot of difficulty in trying to penetrate the wireline telecom space. The Broadband communications group is short on "telecom" experience and brain power. IMO they should stick to MSO cable distribution plant with PON.

atmguy 12/5/2012 | 2:08:43 AM
re: Motorola to Buy Quantum Bridge
Anyway you look at it, Quantum has no other choice. All these guys have to sell out to some big guys in order to survive. Only the big guys can wait out the market downturn in the market or take a chance.

Anyone knows the numbers yet?
hephail 12/5/2012 | 2:08:40 AM
re: Motorola to Buy Quantum Bridge y cant motorola stick to their own line and strenghten it instead of fishing using thin thread?
Peter Heywood 12/5/2012 | 2:08:38 AM
re: Motorola to Buy Quantum Bridge It's a bit of a coincidence that we ran a story on VDSL developments on the same day as this announcement:


It makes it sound as though Motorola has managed to cover all bases
Peter Heywood 12/5/2012 | 2:08:38 AM
re: Motorola to Buy Quantum Bridge Although I don't have the numbers, I would have thought that this was probably a no-brainer for Motorola. They probably got Quantum Bridge for a song and they'd been working with Quantum Bridge, and winning projects with them, for a year, so they had a really good idea of what they were buying.

On "why doesn't Motorola stick to its knitting" - isn't this all about Motorola trying to leverage the video experience with MSOs in the telco market? That sounds like a good idea to me.
truelight 12/5/2012 | 2:08:31 AM
re: Motorola to Buy Quantum Bridge Perception verus Reality Peter.

truelight 12/5/2012 | 2:08:31 AM
re: Motorola to Buy Quantum Bridge Peter, your deductions are questionable. The success selling to MSO versus Telco does not translate 1 for for 1, the rverese is also true. Both carriers oeprate under different models. If you look at Motorola success they sell "widgets" not infrastructure systems. While they are clearly trying to move into this space - buying products on the cheap does not make it. Especially by a company that has no credibility in wireline. Only a newbie or wannabe would think otherwise.

Peter Heywood 12/5/2012 | 2:08:10 AM
re: Motorola to Buy Quantum Bridge I will start the bidding at $25m
litebegone 12/5/2012 | 2:08:02 AM
re: Motorola to Buy Quantum Bridge If being bought for less money then you've
raised in funding rounds is considered a
"Fire Sale", then this can easily by considered
a "Fire Sale".

Another way to put it is this:

The amount that QBC is being sold for is
not exactly an amount that should be
considered as "Huge".

uno04 12/5/2012 | 2:07:56 AM
re: Motorola to Buy Quantum Bridge
I heard rumours of close to 100 mil. I don't know how this source got it or it is speculation.
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