Cabletron Systems, Inc. on Monday is expected to announce plans to buy NetVantage, Inc., an El Segundo, Calif. maker of workgroup Ethernet switches, according to industry sources.
NetVantage sells a variety of low cost 10M bit/sec and 100M bit/sec switches, and has been working to add Gigabit Ethernet uplinks to its switches as well. The company, which reported revenue of $16.9 million and a net loss of $18 million for 1997, sells its products through a host of OEM arrangements.
Industry observers and sources close to Cabletron said Cabletron is making the acquisition to obtain a product line that can be sold easily through indirect channels. Don Reed, who last week resigned as Cabletron's CEO, had been working hard in recent months to forge a closer relationship between Cabletron and resellers. Cabletron has long focused on direct sales of its internetwork gear, a strategy the company has used to stay close to customers and build a loyal following.
The NetVantage products will give Cabletron a product line that can match up with Bay Networks, Inc.'s NetICs-based switches as well as low priced switches from the likes of Cisco Systems, Inc. and 3Com Corp.
NetVantage officials were not available at press time. Cabletron officials declined to comment.
