ROADMs a selling point in Xtera, Meriton deal

Xtera Communications’ acquisition of Meriton Networks for an undisclosed sum gets the long-haul optical equipment vendor into the hot market for metro transport gear based on Provider Backbone Transport (PBT). But one of the key drivers of the deal was a much older product, one that has already changed corporate owners twice before.

In citing justifications for the deal announced today, Xtera was particularly enthusiastic about Meriton’s products and expertise in the reconfigurable optical add/drop (ROADM) space, one that compliments Xtera’s focus on long-haul optical equipment. Meriton’s ROADM business was acquired from Mahi Networks in 2005, which itself acquired the product line from its creator, Photuris, in 2004.

“When you look at [Meriton’s] ROADM skills and technology, that’s useful not just across the metro but in the long haul,” said Peter Boland, Xtera’s chief technology officer. “That’s really going to help us.”

In fact, Boland recalled when, in a previous job working for Xtera customer Flag Telecom, the carrier used Xtera gear to connect its long-haul network to metro points of presence but needed another vendor to interconnect those metro POPs. “Meriton’s gear would have helped,” Boland said.

For that reason, Xtera had been developing ROADM products internally when it opted to buy Meriton, whose 6400 ROADM has already been deployed widely by tier-two carriers in particular, Meriton said, adding that North American CLECs are included in that group.

Photuris was a technological leader in the ROADM space. Though the startup had raised more than $100 million in bubble-era funding and won a small deployment at Verizon, it ran out of cash in 2004 after losing a bid to supply SBC Communications (now AT&T) and was acquired for $1.8 million by Mahi Networks, which was itself acquired for an unknown sum by Meriton in 2005. At the time, Mahi had raised about $255 million in funding, and Meriton had raised about $100 million.

One former Photuris employee that won’t be part of the acquired talent pool this time is Bill Gartner, Meriton’s chief operating officer, who was also COO of Mahi and Photuris. Though Gartner is still listed as Meriton’s COO today, an Xtera spokesperson said he “has left the company.”

Meriton’s latest focus on PBT came late last year when it added the connection-oriented layer 2 technology to the 7200, the optical switch it debuted in 2002 that has been deployed by Korea Telecom and others.