Bay acquires New Oak Communications
The Santa Clara, Calif., company announced it has acquired New Oak Communications Inc., a privately held startup in Acton, Mass., that makes access switches focused heavily on security and VPNs.
The deal is worth a total of $156 million--$133 million in common stock and $23 million in cash. Bay will take a one-time charge for the transaction in the quarter ending March 28, officials in said.
Bay (BAY) inherits two products-the NOC 4000 and the NOC 2000, the latter to be introduced at ComNet in Washington later this month. Both devices enable corporations to set up VPNs as part of a larger outsourcing deal with an Internet service provider.
"New Oak basically has one product, but it's a good product," said Maribel Lopez, an analyst at Forrester Research Inc. in Cambridge, Mass. "Bay needed the VPN technology and New Oak needed a channel to sell into, so it makes perfect sense."
For New Oak President and CEO Jeff McCarthy, the deal brings him full circle, as he worked at Bay before founding his company.
"Getting the distribution engine of Bay fired up to take our product worldwide is great," said McCarthy, who will become head of Bay's Internet Telecom Business Group. "Bay is taking a leadership position in VPNs with this acquisition, and that's important. It will be a huge market, and it's hitting quickly."
The unique aspect of New Oak's architecture is that it divorces the access switch from modem technology. This way, all security stays with the corporation inside the New Oak hardware while IT administrators can leave it to the ISP to manage the connection. The NOC 4000 and 2000 can be sold directly to a corporation or to an ISP, which would offer the box as part of a service agreement, a business model similar to cable set-top boxes.
The NOC line also incorporates directories into its architecture. Support for LDAP (Lightweight Directory Access Protocol), which ties disparate directories on the network together, will enhance quality of service features.
The NOC 4000 will begin shipping through Bay's channels in the second quarter. No ship date for the NOC 2000 has been set.
The New Oak brand name will likely be dissolved, but the Acton facility, which is close to Bay's Billerica, Mass., operations, will remain in operation for the time being, New Oak officials said.
New Oak was member of a bumper crop of startups pushing access toward carrier-class features and new levels of service. Others include One Box Networks Inc., Assured Access Inc. and Aptis Communications Inc.
Bay closed up $3 yesterday at $28.44. The company is expected to report earnings for the fourth quarter on January 20.
Bay is at www.baynetworks.com. New Oak is at www.newoak.com.
Bay Networks Inc. today bought its way into virtual private networking.
The Santa Clara, Calif., company announced it has acquired New Oak Communications Inc., a privately held startup in Acton, Mass., that makes access switches focused heavily on security and VPNs.
The deal is worth a total of $156 million--$133 million in common stock and $23 million in cash. Bay will take a one-time charge for the transaction in the quarter ending March 28, officials in said.
Bay (BAY) inherits two products-the NOC 4000 and the NOC 2000, the latter to be introduced at ComNet in Washington later this month. Both devices enable corporations to set up VPNs as part of a larger outsourcing deal with an Internet service provider.
"New Oak basically has one product, but it's a good product," said Maribel Lopez, an analyst at Forrester Research Inc. in Cambridge, Mass. "Bay needed the VPN technology and New Oak needed a channel to sell into, so it makes perfect sense."
For New Oak President and CEO Jeff McCarthy, the deal brings him full circle, as he worked at Bay before founding his company.
"Getting the distribution engine of Bay fired up to take our product worldwide is great," said McCarthy, who will become head of Bay's Internet Telecom Business Group. "Bay is taking a leadership position in VPNs with this acquisition, and that's important. It will be a huge market, and it's hitting quickly."
The unique aspect of New Oak's architecture is that it divorces the access switch from modem technology. This way, all security stays with the corporation inside the New Oak hardware while IT administrators can leave it to the ISP to manage the connection. The NOC 4000 and 2000 can be sold directly to a corporation or to an ISP, which would offer the box as part of a service agreement, a business model similar to cable set-top boxes.
The NOC line also incorporates directories into its architecture. Support for LDAP (Lightweight Directory Access Protocol), which ties disparate directories on the network together, will enhance quality of service features.
The NOC 4000 will begin shipping through Bay's channels in the second quarter. No ship date for the NOC 2000 has been set.
The New Oak brand name will likely be dissolved, but the Acton facility, which is close to Bay's Billerica, Mass., operations, will remain in operation for the time being, New Oak officials said.
New Oak was member of a bumper crop of startups pushing access toward carrier-class features and new levels of service. Others include One Box Networks Inc., Assured Access Inc. and Aptis Communications Inc.
Bay closed up $3 yesterday at $28.44. The company is expected to report earnings for the fourth quarter on January 20.
Bay is at www.baynetworks.com. New Oak is at www.newoak.com.