Next phase for NexTone is NextPoint

NexTone and Reef Point put an end to speculation today that the companies would merge by actually doing so and in the process picked up $20 million in additional financing for working capital and researchand development.

Reef Point CEO Woody Ritchey will take over as CEO of the combined companies. David Walsh, chairman of NexTone responsible for operations within the company, will step out of operations and assume chairmanship of NextPoint. Walsh is also partner with One Equity Partners, the private equity arm of JP Morgan Chase, which has invested in both companies and led the recent round of financing.

“When I made the investment in Reef Point [over a year ago], I did it with the thought we might be able to combine these companies, but I wanted the management teams of both companies to come to that conclusion on their own,” Walsh said. “After they had worked with each other for a while, they came to the same conclusion.“

Working together, the companies created--and introduced at VON last month--its Integrated Border Gateway. NexTone had been a provider of session border controller technology and Reef Point a provider of mobile access and security gateways. Their merger will create solutions for mobile and fixed-network connectivity.

“There is a lot of talk about convergence and clearly the market is moving toward a model where you have ubiquitous access. We now have a company that can provide that,” Walsh said.

Stephane Teral, principal analyst at Infonetics Research, said a new network element such as the IBG creates a single platform that works with existing packet-based products to optimize any type of fixed-mobile converged FMC architecture. “The combination of NexTone and Reef Point into a single company is good news for the industry and an example of this fundamental shift toward multi-access convergence gateways."

The definitive agreement was signed on December 2 and the transaction is expected to close in early January. However, that may not be the last of this type of news from the company. “With One Equity Partners as JP Morgan’s balance sheet, there is big support behind this business. There is no good idea [including acquisitions] this company can come up with that we wouldn’t be interested in supporting,” Walsh said.

NextPoint will now offer an integrated border controller, session border controller, multiprotocol session exchange, real-time session manager, femtocell gateway and wireless gateway.

Its first deal as a combined company also was announced today by way of a partnership with ZTE to provide its femtocell gateway to ZTE’s UMTS solutions. NextPoint and ZTE will offer joint solutions around UMTS femtocell requirements.

Ritchey said that while the ZTE partnership is primarily around the company’s femtocell gateway product (part of its security gateway architecture), “We expect that over the next few days you will see other partnerships that are very indicative of our IBG approach.”