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Network hardware industry

Conexant Systems Acquires NetPlane Systems, Expanding Network Access Division

Strategic Insights

— 2 min read

Conexant Systems Inc. (Nasdaq: CNXT) has announced the acquisition of NetPlane Systems of Dedham, Mass., in an all-stock transaction. This move accelerates Conexant's entry into the network switching business, complementing its recent acquisition of HotRail Inc. and earlier acquisition of Maker Communications. NetPlane's software offering will enable Conexant to seamlessly co-design the silicon and software necessary for creating complete network-system solutions. The acquisition will also bring Conexant a major software presence in Hyderabad, India, a recognized center for software engineering talent.

Key Takeaways:

  • Conexant has acquired NetPlane Systems in an all-stock transaction, expanding its Network Access Division and accelerating its entry into the network switching business.
  • NetPlane's software offering complements Conexant's communications semiconductor portfolio and will enable the company to seamlessly co-design the silicon and software necessary for creating complete network-system solutions.
  • The acquisition will also give Conexant a major software presence in Hyderabad, India, a recognized center for software engineering talent.
  • NetPlane's 65 employees are expected to stay with the company after the acquisition, with Deepak Shahane, NetPlane's president and chief executive officer, managing the subsidiary organization and reporting to Raouf Halim, senior vice president and general manager for Conexant's Network Access Division.
  • The acquisition is expected to give Conexant additional opportunities to grow its product breadth and market share, and will enable the company to offer highly integrated, complete solutions for next-generation networks.
  • NetPlane's software performs network control and service internetworking functions across layers two through four of the seven-layer Open Systems Interconnection (OSI) reference model of protocols used in the Internet infrastructure.
  • The company has developed a powerful suite of control software for core network equipment, and is leading the industry in MPLS, a key enabling technology for next-generation IP and optical networks.

Statistics:

  • Conexant has a revenue run-rate of approximately $2 billion per year.
  • The NetPlane acquisition is valued at approximately $140 million, based on the closing price of Conexant common shares as of July 18, 2000.
  • NetPlane has more than 200 customers worldwide, and its products have been used in more than 250 equipment designs.
  • The company has an employee base of 65, and operates as a subsidiary of Conexant Systems Inc.
  • NetPlane's software team has a strong presence in Hyderabad, India, a recognized center for software engineering talent.

Sources:

  • Business Wire, July 19, 2000 - "Conexant Systems Inc. Announces Agreement to Acquire NetPlane Systems"
  • Conexant Systems Inc. press release, July 19, 2000 - "Conexant Systems Inc. Announces Agreement to Acquire NetPlane Systems"
  • NetPlane Systems website - www.netplane.com
  • Conexant Systems Inc. website - www.conexant.com

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