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Optical/IP

Sources: Anda Also Pursuing Polaris

Equipment vendor Polaris Networks makes a big switch for big networks, but the company is too small to land a big contract.

That reality has led the company to put itself up for sale, and Light Reading sources say the company is close to being acquired by Ethernet infrastructure provider Anda Networks Inc. in an asset-only deal.

The aquisition would put Anda, a provider of broadband access solutions, into the wideband switching market -- giving it something carriers need, to aggregate and switch loads of bandwidth coming from their access networks.

Polaris CEO Surya Panditi confirms that acquisition talks are under way, but he won't name the suitors and says there's still no clear winner.

Light Reading reported January 14 that Polaris was on the selling block and that Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA) appeared to be the only suitor.

In the days since, Anda has emerged as the probable buyer. Calls to CEO Charles Kenmore were not returned as of press time Tuesday.

Panditi says his company has had “several discussions” about an acquisition of the company. “I really can’t comment; there is no signed agreement with any potential partner,” Panditi says, signed being the operative word there.

Panditi confirms that Polaris's bid to sell its switching products to large service providers, and its acquisition plans, are closely related.

Polaris's optical switch product, Panditi says, is seen as viable and attractive to the Verizons and Sprints of the world, but Polaris is simply too small a company to win those contracts. Panditi believes Polaris must merge with a “larger, incumbent” equipment provider. Sprint Corp. (NYSE: FON) and Verizon Communications Inc. (NYSE: VZ) both have reportedly tested the Polaris product, a metro switch combining digital crossconnect and Sonet ADM capability.

Polaris's switch is meant to replace old digital crossconnects, such as the Tellabs Titan 5500, by doing their job in a smaller space while adding the functionality of several Sonet add/drop multiplexers (ADMs). Its capacity starts at 240 Gbit/s and scales to 2 Tbit/s, and it handles circuits in smaller increments than core switches -- VT1.5 (1.7 Mbit/s) chunks vs. STS1 (51.84 Mbit/s) chunks.

In the meantime, Polaris is set to announce a new customer deal with a “medium-sized” service provider, perhaps later this week. The contingency of this contract on the announcement of a partner is also still unclear.

“This week we will announce a contract with a service provider servicing 20 to 25 markets and with 40 to 50 switch sites,” Panditi says. “That is a demonstration of the product’s appeal to the market.”

San Jose, Calif.-based Polaris was founded in June 2000 and has raised $77 million in venture capital.

Sunnyvale, Calif.-based Anda was founded in 1998 and is privately held.

— Mark Sullivan, Reporter, Light Reading

OSXman 12/5/2012 | 3:29:23 AM
re: Sources: Anda Also Pursuing Polaris I don't know much about ANDA except for they tried to go public in 2000, but just missed the window.

My gut feeling is that they wouldn't be meaty enough to change Polaris' prospects meaningfully, but I could easily be wrong since I have no idea what their financials look like.

I read recently somewhere that ANDA won a whole bunch of business in China, so maybe they are doing better than it would seem. Or maybe there are some real synergies here and someone's got something up his sleeve...
Toad680 12/5/2012 | 3:29:23 AM
re: Sources: Anda Also Pursuing Polaris Tony Sun's on the board of both Anda and Polaris. Venrock, his VC fund, invested in both.

I'm not really sure what a deal with Anda does for Polaris. Can't imagine Verizon is waiting for the comfort an Anda Networks brings to the deal. But maybe business has been booming for Anda more than one would imagine.

Panditi is clearly talking new business and it doesn't take a rocket scientist to see who probably put this together if it winds up being Anda. hxxp://venrock.com/bio_as dot html In fact, I'd say Tellabs is at a disadvantage. So more power to you Tony.

Will be impressed if there is a significant deal to come from this. But vt 1.5 grooming is becoming more and more important. Who knows.
ThouShaltNotJudge 12/5/2012 | 3:29:22 AM
re: Sources: Anda Also Pursuing Polaris Last I heard (well over a year ago) is that the OMX VT1.5 grooming capability came with a steep matrix bandwidth and configuration management penalty. Has this problem been solved or improved?

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