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NetWorth Acquires Network Resources Corp. in Bid for Ethernet Switching Dominance

Strategic Insights

— 2 min read

NetWorth, a leading developer of intelligent networking hubs and switches, has made a significant move in the Ethernet switching market by acquiring San Jose-based Network Resources Corp. (NRC) for $5.75 million in stock and cash. The acquisition is expected to accelerate NetWorth's time-to-market in key product areas, including Ethernet, FDDI, Fast Ethernet, and ATM switching capabilities. NRC's innovative routing technology will also be applied to the switching and remote office hub market segments, further solidifying NetWorth's position in the Ethernet switching market.

Key Takeaways:

  • NetWorth acquires Network Resources Corp. (NRC) for $5.75 million, comprising 2 million shares of NetWorth common stock, $4 million in cash, and up to 750,000 additional shares of NetWorth common stock depending on market price.
  • NRC's acquisition accelerates NetWorth's time-to-market in key product areas, including Ethernet, FDDI, Fast Ethernet, and ATM switching capabilities.
  • NRC's innovative routing technology will be applied to the switching and remote office hub market segments.
  • NetWorth plans to announce and demonstrate new high-speed stackable switching hubs at NetWorld plus Interop in Las Vegas.
  • The acquisition is expected to provide users with a complete line of solutions for their 10BASE-T and high-speed 100BASE-T Ethernet network requirements.
  • NRC's acquisition gives NetWorth a core competency in Ethernet switching technology, allowing them to expand their switching product line with better profit margins.
  • The acquisition is expected to enable NetWorth to begin shipping a new family of Ethernet switches that will rival those of earlier entrants, such as 3Com's LANplex and LinkSwitch products.
  • The switching market has experienced geometric growth in recent years, with DataQuest forecasting worldwide industry sales of Ethernet switching hubs to grow to $1.1 billion in 1995 from $371 million in 1994.

Statistics:

  • $5.75 million: the total value of the NRC acquisition.
  • 2 million shares: the number of shares of NetWorth common stock issued as part of the acquisition.
  • $4 million: the amount of cash paid in the acquisition.
  • Up to 750,000 additional shares: the possible amount of NetWorth common stock issued dependent on market price.
  • $371 million: the 1994 worldwide industry sales of Ethernet switching hubs.
  • $1.1 billion: the 1995 forecast for worldwide industry sales of Ethernet switching hubs.
  • 61 Daggett Dr., San Jose, Calif., 95134: the location of NetWorth Switching Systems Group (SSG).
  • 408/383-9300: the phone number for NetWorth SSG.

Sources:

  • Business Wire, March 13, 1995
  • DataQuest
  • NetWorth, Inc. press release, March 13, 1995

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