US tech firm acquires Xybridge

BANGALORE: Zhone Technologies, Inc., (Zhone), the US-based broadband network

equipment company, has acquired Xybridge Technologies Inc., the telecom product

subsidiary of the Bangalore-based Ind-TeleSoft Ltd., operating from Dallas,

Texas.

Since Zhone has already filed S1 registration with the US Securities Exchange

Commission (SEC) for an initial public offer (IPO) during the first quarter (Q1)

of 2001 and listing on the Wall Street subsequently, promoters of Xybridge or

TeleSoft could not disclose the acquisition value, including premium, though it

was a swap deal.

"The dollar value of the deal cannot be disclosed now due to SEC’s ‘quiet

period' restriction on valuations made in a share swap," said Jawad Ayaz,

founder and chairman of TeleSoft, and a promoter of Xybridge.

TeleSoft co-founder and COO, however, told this correspondent here on Tuesday

that as a parent company, TeleSoft had floated Xybridge two years ago in the US

by diluting 14 per cent of its own paid-up capital of $0.5 million (Rs 20

million) to Intel and ICICI as part of its first round of venture capital

funding to raise $4 million.

In June this year, Motorola awarded a licensing contract to Xybridge for

supplying its Softswitch technology, which is the first of its kind in the

world, and patented by the latter.

"In the second round of funding, which also took place two quarters ago,

Motorola invested $15 million in Xybridge for an equity stake. The technology

also enabled Xybridge to win NTT DoCoMo 3G wireless network trial in the US

along with Motorola and Cisco in October last," Ayaz claimed.

Founded by Mory Ejabat and Janet Symmons last September, Zhone set a record of

sorts by raising $500 million in the first round of funding with a valuation of

$1 billion, and that too, within one month of setting it up.

Though Softswitch technology was developed in India by the $4-million TeleSoft,

licensing of its product was delegated to Xybridge for marketing and

installation. Besides the license fee, TeleSoft will now share the royalty for

it from Zhone in the post-acquisition scenario.

As a broadband network equipment vendor, Zhone has built the telecom industry's

first complete line of communication infrastructure for the local loop access

network. It is projected to post revenues of $200 million in the first full year

of operations, ending this month.

Zhone's advanced networking solutions include the Single Line Multi-Service

(SLMS) architecture, Zhone Management Systems (ZMS), Broadband Access Node

(BAN), Sechtor universal voice gateway, and Z-Edge access products. They support

a rich array of voice, data, video, Internet, and entertainment services.

"Xybridge's Softswitch technology provides a strategic complement to

Zhone's broadband access equipment, allowing the latter to deliver a

comprehensive multimedia solution for the local loop," Chandran stated.

As a leader in building the telecom industry's first career-class solutions for

broadband fixed and mobile networks, the $10-million Xybridge offers mobility

management, call control, and features over a distributed, open IP-core

infrastructure.