(REUTERS) -- Avaya Inc., the communications equipment company spun off from Lucent Technologies Inc., said on Monday it agreed to acquire VPNet Technologies Inc. for $120 million in cash in a move to expand its presence in the data networking market.
Privately held VPNet, based in Milpitas, Calif., makes virtual private network equipment and devices for communications services providers and corporations. Virtual private networks allow companies to conduct business or store information on a public network, such as the Internet, but have the security of private network.
"The addition of VPNet strengthens our capabilities in data networking," said Avaya Chief Executive Don Peterson. "VPNet's products and services help customers take full advantage of the benefits from VPNs of security, productivity and cost-effectiveness."
The VPN equipment market is expected to grow at a compound annual rate of 40 percent to $4.3 billion from 1999 through 2003, industry analysts said.
Excluding in-process research and development, and the amortization of goodwill, the deal is expected to reduce Avaya's cash earnings in fiscal 2001 by 3 cents a share. Including those costs, the deal will hurt cash earnings by a greater extent. Additional details were not provided. The deal is expected to close in the quarter ending March 31.
Copyright (c) 2000 Reuters Limited. Reuters content is the intellectual property of Reuters Limited. For additional information on other Reuters Services please visit the Reuters public web site -- http://www.reuters.com.
This story, "Avaya to acquire VPNet for $120 million in cash" was originally published by InfoWorld.