Motorola Deals for RiverDelta
Motorola Inc. (NYSE: MOT) last night announced that it is buying broadband equipment startup RiverDelta Networks for $300 million in stock (see Motorola to Acquire RiverDelta ). Light Reading first reported in June that the two companies were in talks (see Motorola Talking to RiverDelta?).
The move did not leave an enormous impression on Motorola investors. Motorola shares this morning stock fell 0.09 (0.47%) to 18.94.
RiverDelta will give Motorola a largely complementary set of products, including a next-generation cable modem termination system (CMTS) with routing capability and wide area network (WAN) interfaces. Motorola's CMTS products are targeted toward small to mid-sized cable head ends, but RiverDelta's product is made for the larger signal origination points in cable TV networks.
RiverDelta will become part of Motorola's Internet Protocol Network Systems group, a unit of its Broadband Communications Segment that has suffered from slowing sales and orders. During Motorola's most recent quarterly conference call, the Broadband Communications Segment reported that its sales increased 7 percent to $820 million but orders fell 16 percent to $760 million from its year-ago results.
RiverDelta has 200 employees based in Massachusetts, in close proximity to Motorola's existing CMTS business unit. The company was founded in 1999 and has raised $46 million in funding to date from Charles River Ventures, Battery Ventures, and Pequot Capital Management Inc.
- Phil Harvey, Senior Editor, Light Reading