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Motorola to buy RiverDelta for $300 M in stock

Mon, 07/30/2001 - 8:00pm
Anne Kerven

Motorola Inc. will buy RiverDelta Networks Inc. in a stock transaction worth about $300 million, depending on Motorola's stock price prior to the deal's closing later this year.

Under the deal, Motorola will receive all of RiverDelta Networks' capital stock in exchange for shares of Motorola's common stock. The company says the exchange ratio will be fixed prior to closing and will be based on the average trading price of Motorola's common stock.

A key reason for the purchase is that Motorola Broadband Communications Sector wanted RiverDelta's routing technology, says spokeswoman Jeanne Russo. "It's a nice addition to our CMTS platform."

"We made the acquisition to enhance our current CMTS line," Russo says. Motorola's existing modular CMTS product line suits small to medium headends, she says, "with emphasis on advanced VoIP protocols and high-availability capabilities." The solution relies on a third-party router, however.

"RiverDelta's platform addresses the needs of large, high-density headends and supports an extensive suite of routing protocols and WAN interfaces," she adds. The line "broadens our product line coverage across all system sizes and into regional IP network applications."

Russo would not speculate on whether any of RiverDelta's facilities would close or any of its 200 staff members would be laid off. "The whole purpose of this acquisition is to position the two companies into one poised for profitable high growth," she notes. With the acquisition announcement, management will meet to "figure out the best way to integrate" the companies and meet the goal.

RiverDelta's products include the BSR 64000 broadband services router for large-scale deployment of DOCSIS 1.1. The acquisition will let Motorola offer high-density solutions combining high-availability, integrated routing and per-flow QoS, as well as modular configurations for small/distributed networks, Motorola says.

Russo says the combined lines will let the company provide regional IP network applications.

Independent of the merger, she says, Motorola has an OEM agreement with RiverDelta.

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