Friday, September 15, 2006

Nortel - Force10 Marriage: PE Week Wire

Nortel Networks is nearing an acquisition of Force10 Networks Inc., according to an interview with Susquehanna Financial Group analyst Joe Chiasson in The Deal. Force10 is a Milpitas, Calif.-based provider of 10-Gigabit Ethernet switching and routing solutions, and recently raised Series F funding at a pre-money valuation of around $420 million. Overall, the company has raised over $300 million in VC funding from firms like NEA, Crosslink Capital, U.S. Venture Partners, Pacesetter Capital Group, Morgenthaler Ventures, Meritech Capital Partners and Worldview Technology Partners.

Notes: The rumored acquisition value is $550M according to Joseph Chiasson, an analyst at Susquehanna Financial Group. In a Light Reading article from earlier this year, Dick Kramlich is quoted saying revenues in 2005 are expected to be $60 million, up from $27 million in 2004. That would imply a 9x TTM multiple. Good exit for a company that had been struggling against Cisco and Juniper early on.

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