Tekelec (Calabasas, CA) and Santera Systems Inc. (Plano, TX) announced that they have signed a definitive agreement to combine their next-generation switching businesses to better address the needs of telecommunications service providers. The business, which includes investments of cash and strategic assets from both companies, will be a majority-owned subsidiary of Tekelec and will be called Santera, a Tekelec company.
Under the terms of the agreement, Tekelec will contribute $28 million in cash and its existing packet telephony business. Santera's current investors will contribute its assets and an additional $12 million in cash. Initially, the division will be 52% owned by Tekelec. Tekelec will also have the ability to increase its ownership percentage in the new subsidiary up to 62.5% and has the option to purchase the entire remaining interest during the period from July 1, 2005, through December 31, 2007. The transaction is expected to close before the end of the second quarter, pending US anti-trust approval.
