Overture's Ceterus buy mixes carrier Ethernet markets

Overture Networks announced today it has acquired equipment vendor Ceterus Networks for an undisclosed sum. The deal combines two small but successful vendors in the carrier Ethernet space, adding Ceterus’ strength in mobile backhaul to Overture’s achievements in business services.

Terms of the deal were not disclosed, and because both companies are privately held, information on the companies themselves is limited. Seven-year-old Ceterus has raised about $60 million in funding to date and has about 50 employees, making it not much smaller than Overture, which employs about 60. Ceterus is based in Richardson, Texas, while Overture is based in North Carolina’s Research Triangle Park.

Though Ceterus began selling circuit-bonding equipment into the enterprise space, it began focusing mainly on mobile backhaul a few years ago, and today perhaps its largest (though not officially announced) customer is Clearwire, which is currently expanding a WiMax network with Sprint.

Overture sells a range of access, aggregation and customer premises gear that delivers carrier Ethernet services either natively or over legacy infrastructure such as T-1 or Sonet. (Overture’s gear is also sold by Tellabs through a partnership between the two vendors.) It counts AT&T, Verizon Business and TW Telecom as customers.

Though Overture sells wireless backhaul gear and Ceterus sells into the enterprise space, there is “little overlap” in their product sets, said Michael Howard, principal analyst at Infonetics Research, who called the acquisition a “natural progression” for Overture in a press release from the vendor today.

The combination of Overture and Ceterus could make each company safer by diversifying them into the separate but related markets of backhaul and business services. At the same time, the deal creates the potential for cross-selling one vendor’s products into the other’s markets, Howard said. “They should be able to leverage the Ceterus products in the business market and the Overture products to some extent in the mobile backhaul space.”