ROADM expertise a key to Xtera's acquisition of Meriton

APRIL 10, 2008 By Stephen Hardy -- Xtera Communications' (search for Xtera) desire to integrate reconfigurable optical add/drop multiplexer (ROADM) technology into its long-haul systems played a large part in its decision to acquire Meriton Networks (search for Meriton), according to the company's new vice president of corporate marketing.

Ken Davison, who held a marketing and business development post at Meriton, added that his former company had been seeking some sort of partnership or acquisition. "We've been considering that for some time now, and we were actively looking for a strategic option along those lines," he said. "We'd been in discussions with Xtera for some time."

As described in our initial story on the deal, Xtera started as a supplier of S- and L-Band amplification systems, but morphed into a supplier of long-haul and ultra-long-haul DWDM equipment that incorporated its original amplifier technology. The company has embarked on a string of acquisitions intended to expand its portfolio of optical networking products. The addition of Meriton, which has focused on metro/regional applications, will enable the Xtera to become "a new solution partner for end-to-end next-generation optical networking solutions," in the words of the press release announcing the acquisition.

However, "they were looking at a buy or build situation internally in terms of putting ROADM onto their long-haul systems," Davison says of his new employers. "And we clearly now can complement them and give them the capability to do that. We are in the process of putting a ROADM onto the 7200 [Meriton's optical switching platform for the metro core] and we can now look at that in terms of integrating that into their system." Davison said it was too soon to predict when Xtera would offer such an integrated long-haul platform.

The Meriton acquisition also gives Xtera a play in packet optical transport and other elements of the Carrier Ethernet market, as well as access to more Tier 1 and Tier 2 customers. While Xtera has been very successful with submarine cable systems -- it has received contracts from FLAG, Global Crossing, Columbia Networks for the ARCOS-1 cable, and Faroese Telecom, among others � Davison pointed out that Xtera does serve terrestrial deployments (with FLAG and Energis as two examples).

The addition of long-haul equipment will give Meriton's old sales force something new to discuss with their customers. "We've got customers in parts of Europe now who we've been speaking to, as we've been informing them about the deal, that have been talking to us about the metro side; they now want to learn more about what the long-haul capability of the portfolio is," Davison said. "We were not able to address that before, so that really is a big plus."

Davison says that Meriton will be absorbed into Xtera, with the assets likely operating as a business unit under a new corporate structure. There is a good chance that Meriton's products will be rebranded completely as well. "It's undecided as to whether we look at the whole portfolio and potentially rebrand that or we look at integrating the Meriton 7200, 6400, those numbers, and rebrand them as part of the Xtera family. But it will be one of those two," he explained.

Davison confirmed that Meriton CEO Michael Pascoe and COO Bill Gartner will not join Xtera. However, with Meriton's global sales team remaining intact, sales vice presidents Steve Robinson (North America and Asia Pacific), Jim Axford (EMEA), and Manuel Andrade (CALA) will stay with the company.

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