FRAMINGHAM, 1 MARCH 2011 - Overture Networks and Hatteras Networks, both privately held vendors of carrier Ethernet equipment, have agreed to merge in a deal with undisclosed financial terms.
The companies expect to close the deal in two or three weeks. Both are based in Research Triangle Park, North Carolina, and they plan to move soon to a new, larger facility in the same area. The new company, with more than 200 employees, will be called Overture Networks. Overture CEO Jeff Reedy will keep that title at the merged company, while Hatteras CEO Kevin Sheehan will be president.
Both companies have been selling Ethernet equipment to service providers for more than 10 years, since the early days of carrier Ethernet. The executives said their companies have complementary product lines and together will be able to offer a full lineup of equipment for Ethernet over both fiber and copper lines, allowing carriers to offer services ranging from 1M bps (bits per second) to 10G bps.
"We are trying to become the dominant leader in carrier Ethernet," Reedy said on a conference call on Tuesday announcing the agreement.
Carrier Ethernet is used for high-speed wide-area network services to enterprises, wired backhaul from cellular base stations, and other applications. Verizon Communications, AT&T, Time-Warner Telecom, Magyar Telecom of Hungary and Australian carrier AAPT are among the customers that the combined companies will serve, the executives said. Seven of the eight largest Internet service providers in the U.S. use Overture equipment, Reedy said. All customer relationships will remain in place, he said.
Reedy and Sheehan said they had been talking for three years about a possible merger and chose this time because the carrier Ethernet market is strong. They hope to take the merged company public in time, they said.
The executives did not estimate their annual revenue or forecast the revenue of the combined companies. On the call, analyst Michael Howard of Infonetics Research estimated the merged entity would have revenue between US$60 million and $80 million per year.
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