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Lucent buys Spring Tide
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July 25, 2000: 9:05 a.m. ET
Telecom equipment maker acquires switching gear provider for $1.3B stock
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NEW YORK (CNNfn) - Lucent Technologies agreed Tuesday to acquire privately held Spring Tide Networks, a maker of network switching equipment, for $1.3 billion of stock in a deal aimed at expanding Lucent's position in the Internet protocol market.
Murray Hill, N.J.-based Lucent Technologies (LU: Research, Estimates) will swap 26.8 million shares valued at $50.13 each, Lucent's closing share price Monday, for Spring Tide. Lucent, the world's largest telecommunications equipment maker, already owns nearly 4 percent of the Maynard, Mass.-based company.
The transaction will be completed by Sept. 30, the end of Lucent's fiscal fourth quarter, and result in a one-time charge against earnings in the quarter. The deal also will dilute Lucent's pro forma earnings per share for continuing operations by about 1 cent in fiscal 2001.
 "Spring Tide's people, technology and equipment will play a crucial role in our broadband Internet infrastructure strategy," said Janet Davidson, president of Lucent Technologies' internetworking systems business. "Spring Tide's solution helps service providers deliver more value from their networks by providing these new advanced IP services to their customers, regardless of whether they connect by DSL, cable, wireless or traditional wireline voice networks."
Spring Tide will become part of Lucent's internetworking systems group. Allan Wallack, Spring Tide's president and CEO; Steve Akers, Spring Tide's founder and chief technology officer; and Stephen Collins, the company's founder, will remain with Lucent.
Lucent has been on an acquisition tear, buying 10 companies in the past year, including a $4.5 billion deal for Chromatis Networks in May and a $2.95 billion transaction for Ortel Corp. in February.
On July 20, Lucent reported earnings of $1.0 billion, or 30 cents a diluted share, for its fiscal third quarter, ended June 30, edging past Wall Street's estimates of 29 cents a share. However, the company warned that it may miss expectations for the next two quarters. Lucent also announced plans to float up to 20 percent of its microelectronics unit and spin-off the remainder of its shares in what some analysts believe could be the largest initial public offering ever, estimated at up to $20 billion.
On Monday, Lucent shares fell 7/8 to 50-1/4. 
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Lucent
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