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Cabletron buys DEC unit
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November 25, 1997: 9:18 a.m. ET
Digital's Network Product Business sold for $430 million in cash, stock
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NEW YORK (CNNfn) - Cabletron Systems Inc. agreed to acquire Digital Equipment Corp.'s Network Product Business unit for about $430 million in cash and stock, both companies said Tuesday.
The transaction, which will also be financed with product credits, is part of a strategic reseller and service alliance between Digital and Cabletron. The business will be operated as a separate division within Cabletron to be called Digital Network Products Group.
The acquisition is expected to increase Cabletron's international revenues by between 35 and 40 percent and its channel revenues by more than 100 percent.
The acquisition significantly increases Cabletron's presence in the enterprise and service provider markets, the companies said. Cabletron is the fourth-largest maker of networking products.
DEC's Network Product Business unit currently does over 50 percent of its business outside the U.S. and sells predominantly through third-party distributor and reseller channels.
Digital retains the Internet and Web server product development organizations, and the company's network research laboratories in Palo Alto, Calif., and will be expanding network product support services.
The agreement is expected to be completed within 60 days and is subject to various conditions, including the execution and delivery of definitive agreements and clearance under the Hart-Scott-Rodino Antitrust Act.
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