May 16, 2005 Petach-Tikva, Israel -- ECI Telecom today announced that it has signed a definitive agreement to acquire Laurel Networks. Under the terms of the agreement, ECI will pay $88 million in cash for Laurel. The transaction is subject to standard closing conditions and is expected to close within a few weeks. Upon closing, Laurel will become ECI's Data Networking Division, according to a press release.
ECI, a provider of carrier-class telecommunications platforms, says that Laurel`s products and technology will add edge routing and IP service capabilities to ECI's broadband, optical, and core routing portfolio, enabling enhanced systems functionality and the creation of more complete multi-service IP platforms for service providers.
"Carriers' infrastructure and services are rapidly evolving to IP," remarks Doron Inbar, president and CEO of ECI Telecom. "This acquisition is aligned with our strategic direction to enhance our ability to meet our customers' most demanding needs with innovative solutions, as their next-generation multi-service networks evolve toward a single converged IP network."
Founded in 1999 and based in Pittsburgh, Pennsylvania, Laurel has received a total of $118 million in financing from U.S. venture capital funds, including NEA & Trinity Ventures, as well as from Ciena. According to the release, most of the funding was used for the research and development of the company's line of IP/MPLS multi-service edge routers. The company says it started selling its edge routers in 2002 and has almost doubled its sales every year since, with total sales of $18 million for the 12 months ended April 30, 2005. According to the company, its key customers include Level(3), Korea Telecom, and Dacom. Currently, the company has approximately 150 employees and $9 million in cash.
"The Laurel team has originated the multi-service routing concept, and demonstrated its advantages in flawless deployments at top tier carriers' networks," contends Don Pyle, CEO of Laurel Networks. "By coupling our IP edge routers with ECI's core routers, optical products, and broadband access, we can now create unmatched comprehensive solutions."