Radware is acquiring Nortel's Layer4-7 application delivery products, which were originally acquired by Nortel in 2000 by way of its purchase of Alteon.
It was not unexpected that Nortel would shed some assets as it strives to restructure itself while under bankruptcy protection. Radware, based in Israel, was earlier rumored to be interested in Nortel's Metro Ethernet products.
We'll see if this portends a bigger breakup of the once high-flying telecom gear maker.
Radware issued the following statement: (reprinted in full)
Radware (NASDAQ: RDWR), the leading provider of integrated application delivery solutions for business-smart networking, today announced that it has signed an asset purchase agreement with Nortel [TSX: NT, OTC: NRTLQ] to purchase certain assets related to Nortel's Layer 4-7 Application Delivery Business. Nortel added the application switch product line in October 2000 by way of its corporate acquisition of Alteon WebSystems, Inc.
"We believe acquiring Nortel's Application Delivery Business is a strategic move that will directly benefit Radware and Nortel's [Alteon] customers. Our ultimate goal is to provide them with a stronger, integrated product backed by world-class support and a globally-focused organization," stated Roy Zisapel, CEO, Radware. "We are committed to making this transaction seamless for existing Nortel [Alteon] customers and intend to take the necessary steps to ensure zero disruption to their business when the transfer occurs."
As part of the intended acquisition, Radware would take on Nortel's application delivery products, offering them under a merged brand, Radware Alteon. From the onset, Radware plans to significantly invest in service and support for the existing Nortel [Alteon] customer base as well as augment its current global support infrastructure with all of the necessary resources to guarantee world-class support for these customers.
Additionally, Radware intends to reinforce its commitment to all existing Nortel [Alteon] customers by offering a 5-year support product plan, thus securing the investment of these customers in Nortel [Alteon] technology. Radware also intends to invest in these products by continuing to sell them and invest in their development - leveraging mutual strengths of both Radware and Nortel [Alteon] technologies and experience - to provide customers with the next generation of more reliable, high-performance and feature-rich solutions.
"This move is a positive one for both companies and their respective customers and partners," offered Lucinda Borovick, Research Vice President, Datacenter Networks, IDC. "It will provide a stable path forward for existing Nortel application delivery customers with an established industry provider that specializes in this space and will continue to invest in the advancement of the product line."
The assets to be acquired under the agreement include Nortel's Layer 4-7 application delivery products, intellectual property, certain tangible assets and inventory and certain service contracts. Radware also plans to take on certain employees who will be integrated into the Radware team with a specific focus on products under the Radware Alteon brand.
Nortel has filed the asset purchase agreement with the United States Bankruptcy Court for the District of Delaware along with a motion seeking the establishment of bidding procedures for an auction that allows other qualified bidders to submit higher or otherwise better offers, as required under Section 363 of the U.S. Bankruptcy Code. A similar motion for the approval of the bidding procedures has been scheduled with the Ontario Superior Court of Justice. Consummation of the transaction is subject to higher or otherwise better offers, approval by the United States Bankruptcy Court for the District of Delaware, and the Ontario Superior Court of Justice and the satisfaction of other conditions.
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