Citing the desire to create a one-stop shop for Carrier Ethernet equipment, Overture Networks and Hatteras Networks have agreed to merge. The combined companies will operate under the name Overture Networks.
Jeff Reedy, CEO of Overture, and Kevin Sheehan, who holds the same title at Hatteras, declined to provide financial details of the merger between the two privately held companies in a teleconference with the press yesterday afternoon. They also demurred when asked to estimate the revenue numbers the combined company would generate. However, when Michael Howard, lead analyst at market research firm Infonetics Research offered a range between $60 million and $80 million, Reedy responded, “You may have underestimated us.”
Reedy will retain his CEO title when the merger completes, an event the two executives estimated would take another two or three weeks. Sheehan will become president. They did not provide details of how the executive teams of the two companies will combine.
The executives said that the idea of merging had been a topic of discussion for at least the past three years, generated by the fact that both companies call Research Triangle Park, NC, home and the lack of overlap they see in their respective product lines. Overture Networks had focused mainly on a fiber-optic network approach to Carrier Ethernet edge and aggregation applications (Sidera Networks recently deployed the company's ISG 6000 Carrier Ethernet aggregation platform), while Hatteras had attacked similar requirements based on a bonded-copper scheme. Both product lines will continue to be supported under the Overture Networks brand name, Reedy and Sheehan said.
For Overture, the merger adds geographic scale. The company had focused its efforts in North America, whereas Hatteras served customers in Europe and Asia Pacific as well as North America. Together, the two companies will count seven of the top eight service providers in the U.S. as customers. The new Overture Networks will continue to sell to both Tier 1 and smaller carriers, the executives said.
The executives said they were quite happy to be paired together, rather than with larger companies. They described an IPO as “a target to shoot for at some point in the future.”
"Overture and Hatteras each have demonstrated industry leadership in their own rights, so the meeting of the two offers immediate and long-range benefits," said Stan Hubbard, senior analyst, Heavy Reading, of the merger. "In the near-term, carriers and business customers gain a more powerful ally in the effort to deliver top-quality next-generation Ethernet services. In the long run, the merger opens the door for more efficient use of R&D and other resources to help drive competitive innovation. This is an intelligent move that will resonate positively across the market."
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