Tejas Networks may buy Israel's Ethos

NEW DELHI: Bangalore-based Tejas Networks, India’s largest domestic telecom manufacturing company, is planning to acquire Ethos Networks, an Israel-based high-technology company specialising in carrier ethernet and network management products, a company executive told ET. It will be a share-swap deal where investors in Ethos will be given shares in the unlisted Tejas, its CEO Sanjay Nayak said.

Tejas Networks, which posted sales at Rs 600 crore in the fiscal year 2010, has attracted investments from Goldman Sachs, Intel Capital, MayField Fund and Sandstone Capital. The company’s largest shareholder and chairman, Gururaj Deshpande, a US-based serial entrepreneur, has started and listed three multi-billion dollar companies.

Tejas is the only Indian company that designs, produces, sells and maintains active telecom equipment used in the networks of many global operators. Ethernet is the most widely installed local area network (LAN) technology. Carrier Ethernet involves the use of high-bandwidth ethernet technology for internet access and for communication among business, academic and government local area networks.

“This acquisition completes our portfolio in offering best-in-class, end-to-end multi-service solution for synchronous optical network (SONET) and synchronous digital hierarchy (SDH), Carrier Ethernet and hybrid transmission architectures and a seamless Network Management Software (NMS) suite. Our new portfolio will enable our customers to deploy equipment that can concurrently support legacy services and packet services, and at the same time gracefully evolve to an all-packet infrastructure of the future without any service disruption and costly rip-and-replace.” Mr Nayak said.

Ethos Networks is a four-year old start-up funded by investors. The cashless transaction will imply that Ethos’ investors will be given proportional stake in Tejas. The existing workforce of Ethos will be integrated with Tejas Networks’ global workforce.

Mr Nayak also said that this was the first acquisition of an Israeli high-tech company by an Indian company.
“Ethos acquisition will augment Tejas’ product offerings in the packet optical space and enhance its future proof transport architecture solution,” he added.