Paradyne Networks to acquire Elastic Networks

Largo, Fla.-based Paradyne Networks recently announced that it would acquire Elastic Networks for about $28.8 million.

Not only does Paradyne’s decision to acquire Elastic bring more customers and revenues to the company, it also expands the Paradyne’s DSL. Paradyne, a DSL/DSLAM manufacturer focused on the central office deployment of DSL, will enter the in-building DSL market via the Elastic acquisition.

“It moves us into a market that is complementary into our existing market and synergistic with our existing market,” said Sean Belanger, president and CEO of Paradyne. “Now, we can go to anyone interested in DSL or high-speed broadband over copper, whether they’re in a building, a central office, an ATM-based architecture or an IP-based network architecture … We’ll have an offering for a much broader market.”

Elastic’s EtherLoop technology--a 10-megabit copper-based technology--and the scheduled 2003 release of its EtherLoop2 technology--providing 100 megabits over twisted pair copper--also will enhance Paradyne’s market position. In conjunction with Paradyne’s ReachDSL technology, which has the longest loop reach in the market, the EtherLoop technology will offer the DSL market a real alternative and simultaneously support all standard technologies, Belanger said.

Under terms of the agreement, Elastic stockholders will get 0.1990 to 0.2692 shares of Paradyne common stock for each outstanding share of Elastic common stock. The amount is based on the 10-day average closing price of Paradyne common stock prior to the merger’s completion.

The transaction, subject to stockholder approval at each company and closing conditions, should be completed in first quarter 2002. Paradyne plans to maintain a facility at Elastic Networks’ Alpharetta, Ga., for research and development and some sales and marketing.