Atrica, one of the glorious names of the Israeli high-tech industry, has expired quietly. The company will be sold to telecommunications equipment giant Nokia Siemens Networks. The companies' press release does not mention the price, but as far as is known, Atrica, which develops carrier Ethernet transport solutions for metro systems, will be sold for about $100 million. This is a fairly high sum, but considerably less than the amount invested in Atrica over the years - about $180 million, almost double.
Atrica was founded in 1999 by Avinoam Rubinstain, Zvika Bronstein, and Amir Lahat, all ex-3Com. It's aim was to develop solutions using Ethernet protocol on metro systems. Ethernet is considered a cheap protocol in comparison with the main technology used for data transport on metro systems, based on SONET/SDH. Atrica developed communications switches for metro networks based on Ethernet communications standards.
Atrica was the first to break into this field, but the years 2002-2003 were very tough for the telecommunications world, and the company went through a difficult time. What helped Atrica to cope during this period was the huge sums it managed to raise - some $184 million, much of it in the hard years, including a $71 million round at the beginning of 2002. However, when the problematic period ended, Atrica found itself with several large competitors, among them telecommunications equipment giants such as Cisco and Alcatel. In 2005, one of those giants, Juniper, held talks on buying the company at a valuation of $250 million. The negotiations did not end successfully. Several other companies have been mentioned in the past as suitors for Atrica.
Among the investors in Atrica is 3Com, where the founders came from. The list of investors shows the potential the company was thought to have when it began: Vesbridge Partners LLC (formerly St. Paul Venture Capital), GunnAllen Venture Partners, Intel Capital, Innovacom (France Telecom), JK&B Capital, Investor Growth Capital, Israel's own The Challenge Fund Etgar, and others.
Nokia Siemens Networks is a merger of the infrastructure arms of the two giants. The merger took place in 2006, and the merged entity has shed some 9,000 employees. However, in Israel it has extensive activity, based on three companies: Nokia Siemens Networks Israel (formerly Seabridge, Radnet), which develops advanced infrastructure; a company that sells and services Siemens equipment in Israel; and Nokia Israel, which deals in the company's infrastructure. Now, the company's local development center will grow by some 150 people and will total 500. The Israeli center is managed by Ilan Barda.
Published by Globes [online], Israel business news - www.globes.co.il - on October 25, 2007
© Copyright of Globes Publisher Itonut (1983) Ltd. 2007