Zhone Technologies, a provider of next-gen local loop access solutions, announced plans to merge with Tellium, a developer of core optical switching systems. Mory Ejabat, current chairman and CEO of Zhone Technologies, said that combining the two businesses would create a comprehensive solution for local, metro and long distance service providers. Tellium would also contribute its $149.8 million in cash to the combined company, which would retain the name Zhone Technologies. Ejabat would continue as chairman and CEO of the combined operation. In the long term, the combined company plans to offer access and transport solutions that bridge existing copper-based loops and fiber optics. Zhone has acquired eight companies over the past four years. Some other specifics of the deal:
- Upon closing, Tellium stockholders would own approximately 40% of the new company. The merged company plans to be listed on NASDAQ under the symbol ZHNE.
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Tellium’s Aurora Optical Switch and StarNet Wavelength Management System is a core optical transport and switching platform. It scales up to 512 OC-48/STM-16 ports or 128 OC-192/STM-64 ports for a total capacity 1.28 Tbps. Tellium is based in Oceanport, New Jersey.
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Zhone’s local loop product line includes its Single Line Multi-Service architecture (SLMS), FlexBand Multi-service port, Zhone Management System (ZMS), Broadband Access Node (BAN), Multi-Access Line Concentrator (MALC), AccessNode and Universal Edge 9000 products (purchased from Nortel Networks), Sechtor universal voice gateway, the Z-Edge access products and RAPTOR DSLAM. Zhone is based in Oakland, California.
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Tellium reported net revenue of $10.1 million for Q2 2003 and a net loss (GAAP) of $12.1 million, or $0.12 per share. Tellium ended the quarter with $149.8 million in cash and a net cash burn rate of $7.4 million per quarter. During the quarter, Tellium completed the next phase of a rollout of its optical transport and switching equipment by Cable & Wireless.
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Zhone reported net sales of $20.5 million for Q2 2003, an increase of 20% from net sales of $17.1 million for Q1 2003. There was a net loss of $4.7 million for Q2, compared with a net loss of $6.8 million for Q1.
http://www.zhone.com
http://www.tellium.com
- In February 2003, Zhone Technologies acquired NEC Eluminant Technologies, a developer of optical access products, for an undisclosed sum. Products included in the acquisition include eLUMINANT’s ISC-303 digital loop carrier, the VISTA Access SONET ADM, the RC-28D and RC-28E M13 multiplexers and the FD-6 fiber access multiplexer. NEC retains the rights to the FiberSLAM product and intellectual property associated with the passive optical networking (PON) system.
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In July 2002, Zhone Technologies acquired Vpacket Communications, a start-up that developed a customer premise IP-based voice/data router. Financial terms were not disclosed. Vpacket’s 6100 voice/data router uses a high performance digital signal processor (DSP) for measuring, testing and supporting precise end-to-end VoIP quality and IP Centrex features via third party softswitches and media gateways.
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In August 2001, Zhone Technologies acquired Nortel Networks’ discontinued AccessNode and Universal Edge (UE) 9000 Digital Loop Carrier (DLC) shelf and UE 9000 Remote access shelf product.
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Zhone Technologies was founded in September 1999 by Mory Ejabat, the former President and CEO of Ascend Communications; Jeanette Symons, the former CTO of Ascend; and Robert Dahl, the former CFO of Ascend.