Lucent goes outside for softswitch help, acquires Telica

Lucent Technologies, which says it’s on the verge of releasing its large softswitch, today locked up some outside helping, agreeing to acquire Telica for $295 million in stock and options.

Telica’s PLUS architecture, which produced fiscal year 2003 revenues just north of $19 million, will become part Lucent’s Accelerate platform, which was recently selected by BellSouth as part of the RBOCs transition to packet switching. Specifically, Lucent was looking for a large gateway that would fit in with its softswitch and existing media gateways.

“We intend to extend and grow our portfolio and we’ll do that some significant internal development, through our partnerships and like we’re doing today through acquisition,” Lucent CEO Pat Russo said this morning in a conference call with analysts.

Marlboro, Mass.-based Telica has sold its platform to around 50 customers worldwide over the past several years and signed a supply agreement with Verizon in 2001. Verizon, which had been one of the Lucent’s marquee customers in the circuit switch market, late last year, signed an 18-month exclusive deal with Nortel to provide softswitches. Additionally, Telica has been making a push into the independent telco market. “We regard joining with Lucent as the next logical step,” said John St. Amand, CEO of Telica. Under terms of the deal, Lucent will exchange 92.7 million shares of common stock and options for all of Telica's equity. Additionally, Lucent has established a pool of money and options to use as incentive to retain key Telica employees. St. Amand will remain with Lucent and oversee Telica’s integration into Lucent's INS business.