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Cabletron reports Q1 loss after Yago acquisition

Cabletron reports Q1 loss after Yago acquisition

Despite posting a first-quarter loss of $US152.3 million on sales of $US365.7 million, as a result of its earlier acquisition of router and switch maker Yago Systems, Cabletron yesterday announced plans for another acquisition.

The latest buy is NetVantage, a provider of Ethernet workgroup switching equipment. Cabletron paid about $US100 million for the company Cabletron hopes will expand its presence in the indirect sales channels and in the 10/100Mbps LAN switching market.

The NetVantage deal is the latest in a fast growing list of acquisitions the networking vendor is building. In March this year it completed the Yago deal, while February saw it acquire Digital's Network Products Business for $US430 million.

Cabletron also recently announced plans to enter the Digital Subscriber Line (DSL) market with two more acquisitions. The company said it would pay $US25 million for FlowPoint, maker of xDSL and ISDN equipment, and $US33.5 million for Ariel's Communications Systems Group, which offers ADSL (asymmetrical DSL)-to-ATM (asynchronous transfer mode) equipment.

Cabletron's CEO, Craig Benson, attributed the vendor's poor financial form partly to this strong acquisition drive and a focus on channel expansion.

In April, Cabletron announced plans to change its pricing structure, eliminate some older products and organise the company's sales and marketing according to services not products.

This week's first quarter loss follows losses of $US127.1 million for fiscal year 1998 and $US6.3 million for the fourth quarter of 1998.


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