Ericsson looks to IP in $1.9B Reback buy

Infrastructure giant Ericsson announced it will acquire technology vendor Redback Networks Inc. for $1.9 billion. Ericsson’s stock remained relatively unchanged after the news at about $40.71 per share.
Redback was founded 1996 in San Jose, Calif. The company, which makes a business in multi-service edge routing technology, counts over 700 carrier customers in more than 80 countries and employs about 800 people, including 500 R&D engineers.
“The combined strengths of both companies will create significant value for customers and shareholders and exciting opportunities for employees,” said Carl-Henric Svanberg, Ericsson’s CEO. “The pace of IP deployment is accelerating as operators move to all-IP converged networks, in which quality of service requires increasingly intelligent routers with higher capacity.”
Ericsson said it will combine Redback’s IP technology with its IP Multimedia Subsystem products and services.
Redback is set to become a wholly owned subsidiary of Ericsson, and will become a “cornerstone” of Ericsson’s IP routing platforms and solutions, Ericsson said. The company plans to maintain Redback’s offices and facilities in San Jose and elsewhere.