Radware Interested in Nortel Assets

By Mark Evans | Published: January 7, 2009

Radware Ltd. is apparently poised to acquire a part of Nortel, according to Globes Online.

Radware apparently wants to buy or all of Nortel’s metro Ethernet networks business. Globes Online said Radware as the “wherewithal” to make a deal because it has $137.4-million in cash.

I can’t say Radware has come up as a potential suitor for part or all of the MEN business so this “story” comes as a surprise.

Update: Globes Online is now reporting that Merrill Lynch believes Radware is interested in buying the North American installed base and distribution channels of a Nortel division.

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  • Troller

    Huh? “Sources inform ''Globes'' that Radware Ltd. (Nasdaq: RDWR; TASE: RDWR) is about to acquire a unit of Nortel Networks Corporation (NYSE; TSX: NT) for $30-50 million.” $50 million would be about 1/10 the estimate worth of MEN. Maybe this is just a sliver of MEN or some other division?

    Or just misinformation?

  • TokyoBoyz

    I am thinking its the OME5130 product.

  • TongueInCheek

    Radware is one business of the 14 businesses within The Rad Group. It looks like The Rad Group is a privately held entity while Radware is publicly traded on NASDAQ and recently requested de-listing from the Tel Aviv Exchange.

    Rad Data Communications seems to be the entity that provides Carrier Ethernet solutions, not Radware, so this is an interesting story to say the least.

  • joremero

    whatever they are smoking, they should share it with us so we can all have a happy trip…. unless they paid 50 million in cash and took up 1 billion (+/- a few hundred million) of Nortel's debt, I don't see it even close to happening.

  • Many

    I think $50 million is the starting bid on ebay.

  • protosphere

    A surprise given they wanted cash for it, yes

    Even at half the anticipated value they do not have enough for an all cash deal that Nortel seeks to acquire all of MENs

    At the anticipated $500M, the bids they are are said to have been pondering or stalling as per Simon Avery's article were quoted at $1B, twice the anticipated value.

    Further followed by news they were “low balled” bids in the absence of a bankruptcy judge, which adds to the confusion.

    What what part is removed for $30-50M that sure won't buy new shoes given their cash burn of 250M this quarter?

    Confusing stuff or what….

  • brett5

    They'd be buying a product portfolio and not the MEN business. Would indicate to me that Nortel isn't going the route of BK, rather asset sales.

  • clearasmud

    The Globes Online is vague on details, but it appears that what Radware wants is what used to be Alteon Websystems, not the Metro Ethernet group. This group does applications switches and security appliances. Obviously Radware doesn't have enough cash to buy the Metro biz.

  • Nortel watcher

    I agree with joremero. A lot of attention has been given by the media to multiple bids in the one billion dollar range for the entire MEN division a few weeks ago. Whether the sources for those bids are reliable, that´s another story since all forecasts pointed to MEN having an approx. value of $500M given market turmoil.

  • rikijay

    I think “clearasmud” is in the right path. Radware's note says: “Nortel has four business divisions, one of which competes against Radware, Cisco and F5″ If F5 is included in the list and the potential price is 30-50 MU$, it sounds plausible that the Alteon web switch is the target asset. Remember that the Blade Nortel solution was spinned-off 2 years ago as well into Blade Networks Tech. If this is the case it would be a great pity! Alteon WebSystems was bought by Nortel for more than 7.000 MU$ in year 2000!!!

  • Le_Dude

    Spot on Rikijay.

    These reporters just run with a hunch, nobody does their homework. If I recall correctly, the purchase of Alteon was closer to $8B US. Heck of an investment no?

    http://query.nytimes.com/gst/fullpage.html?res=…

  • Le_Dude

    Spot on rikijay.

    $8B US investment, now worth $50M tops. Heck of investment strategy.

    http://query.nytimes.com/gst/fullpage.html?res=…

  • Ex_Nortel

    Radware is probably making a bid on Nortel's Ethernet Switching (Layer2, Layer3, and the Alteon Layer4 products plus the Tasman Router product set. In this market environment, these businesses have very little resale value since
    they do not generate a profit for Nortel. I would be curious to see if the 8xxx platforms are part of this deal – if there really is a deal.

    Remember, Radware has a reputation as a real bottom feeder. They do not pay premiums for anything.

    And of course, it will be more difficult for Nortel to sell VoIP solutions without their own set of PoE Ethernet Switches. Think of all the FUD that Cisco marketing can make up about the performance of Nortel VoIp products running over a Cisco PoE Ethernet Switching environment. This could be the beginning of some very desparate short term moves.

  • Ex_Nortel

    Radware is probably making a bid on Nortel's Ethernet Switching (Layer2, Layer3, and the Alteon Layer4 products plus the Tasman Router product set. In this market environment, these businesses have very little resale value since
    they do not generate a profit for Nortel. I would be curious to see if the 8xxx platforms are part of this deal – if there really is a deal.

    Remember, Radware has a reputation as a real bottom feeder. They do not pay premiums for anything.

    And of course, it will be more difficult for Nortel to sell VoIP solutions without their own set of PoE Ethernet Switches. Think of all the FUD that Cisco marketing can make up about the performance of Nortel VoIp products running over a Cisco PoE Ethernet Switching environment. This could be the beginning of some very desparate short term moves.

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