Madge cripples Olicom business in acquisition

Madge cripples Olicom business in acquisition

Madge Networks has struck a serious blow to the future of competitor Olicom, announcing late yesterday the acquisition of its token ring business.

Madge division Madge.connect has made an up-front cash payment of $US15 million and will provide additional cash payments over the next three years based on Madge's Token-Ring revenue performance.

As a result, the company has acquired certain Olicom Token-Ring inventory in the quarters following the sale, plus all the intellectual property and the rights to manufacture, sell and develop Olicom's Token Ring product portfolio.

The deal also includes Olicom's Token Ring customer base and some key Olicom employees, the company reports.

Madge Networks announced last week it will restructure into separate legal entities - Madge.connect (a global network solutions provider) and Madge.web (a global managed network and hosting provider), with Madge Networks N.V. as the holding company.

According to Mike Wilson, CEO of Madge.connect: "The Olicom acquisition is a catalyst for Madge.connect's strategy to accelerate development of next generation Token Ring technology."

Local Madge and Olicom executives were not available for comment by ARN's deadline.

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