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CMTS Combo: Juniper to buy Pacific Broadband for $200 M

Mon, 11/12/2001 - 7:00pm
Jeff Baumgartner

Jumping headlong into the cable network equipment market, Juniper Networks Inc. inked a deal to acquire start-up Pacific Broadband Communications for $200 million in stock.

The deal, which is expected to close before the end of the year, will give Juniper access to PBC's "Kodiak" line of cable modem termination systems, as well as the custom silicon and software to run them.

The agreement also marks the latest in the quickly consolidating "next-gen" CMTS sector, as start-ups continue to be gobbled up by bigger fish.

Most recently, Motorola Inc. meted out $300 million to acquire RiverDelta Networks Inc., and, last year, ADC Telecommunications acquired Broadband Access Systems Inc.

PBC's core CMTS technology is qualified for DOCSIS 1.0, and the company has submitted the Kodiak chassis to CableLabs for 1.0 qualification in the current testing wave, which concludes Dec. 14. Qualification for the more advanced DOCSIS 1.1 spec is on Juniper's roadmap for the Kodiak, said company President and CEO Scott Kriens, during a Monday afternoon call with reporters and analysts.

PBC makes its own CMTS silicon, a similar tactic that Terayon Communication Systems' Imedia Semiconductor is using to differentiate itself in the crowded next-gen CMTS marketplace.

Kriens said PBC's products will complement Juniper's portfolio and extend it beyond core IP and edge-network routing products.

PBC has yet to announce any deployments with MSOs, although the company expects to enter a number of cable operator trials this quarter.

Juniper's acquisition will not impact PBC's recently announced marketing deal with Scientific-Atlanta Inc., company officials said. That agreement calls for S-A to be PBC's exclusive North American and nonexclusive international CMTS reseller partner, peddling the Kodiak under the "Prisma G10" brand. PBC and S-A are also collaborating on a CMTS line card dubbed the "Prisma IP." That work is expected to continue.

S-A Vice President of Network Architecture Paul Connolly said adding Juniper to the mix will help the companies "bring even more innovation" to cable operators.

Additionally, S-A's recent deal to acquire BarcoNet will complement the company's international efforts. "Europe is a high growth area and we wanted to strengthen our position in Europe," Connolly said.

Kriens said he spent time with S-A CEO Jim McDonald last week to discuss Juniper's deal, and that both parties were "enthused" about tackling the CMTS market together.

Part of that might occur in Europe. In a press release, Liberty Media Group Chief Technology Officer Tony Werner, who also serves on PBC's board of directors, gave the deal his blessing. Liberty Media owns a chunk of large cable systems in Europe.

Kriens declined to discuss what impact, if any, Liberty would have on PBC equipment sales, noting that there is "clearly a global opportunity" for PBC's products.

PBC Vice President of Strategic Marketing Tom Fong said the company plans to submit the Kodiak for EuroDOCSIS qualification early next year.

For Juniper, the deal gives it a stronger line into the cable sector, although the company does provide routing equipment to operators in China and France.

Juniper Vice President of Marketing Carl Showalter said he expects "most" of PBC's existing staff to join Juniper once the deal is completed. He added that PBC and Juniper are relatively co-located (PBC is based in San Jose and Juniper is headquartered in Sunnyvale, Calif.), and that PBC staffers will join a new Juniper product team. Today, PBC has about 150 employees, 96 of them engineers.

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