April 8, 2004 Stockholm, Sweden -- Net Insight has announced an agreement to acquire privately held Q2 Labs AB, founded in 2003 by a team comprised of former Qeyton Systems engineers (acquired by Cisco in 2000) and Cisco Photonics Sweden. The acquisition of Q2 Labs enhances Net Insight's existing product portfolio with integrated CWDM transport functionality and Next-Generation SDH/SONET (GFP).
Further, the combination of the Q2 Labs optical team with the Net Insight networking and switching expertise strengthens the continuing development of Net Insight's Nimbra product platform, say representatives from Net Insight. The acquisition will lead to new features and new products in the company's Triple Play and Broadcast Transport product line.
Q2 Labs brings developed components as well as know-how in cost-effective product architecture and design. Q2 Labs has market recognition based on previous success within Qeyton and Cisco, which will help Net Insight to extend its contacts with new customers and partners.
Per the agreement, 2.5 million Net Insight's shares of series B will be exchanged for all outstanding shares of Q2 Labs (approx. 1% dilution in Net Insight). The acquisition of Q2 Labs is expected to close in the first quarter of Net Insight's fiscal year 2004. The acquisition has been approved by the board of directors of each company, all key employees and all shareholders in Q2 Labs. Further, the transaction is subject to various closing conditions, such as approval by the annual shareholders meeting in Net Insight.
Some of the members of the team will join on project basis; others will be employees of Net Insight. Q2 Labs is owned by its founders and external shareholders. Two of Net Insight's major shareholders include Lars Egnell (owning 11.2 % of Q2 Labs) and Pelago Venture Partners AB (owning approximately 3.7 % of Q2 Labs).
"Net Insight will be even more competitive by adding Q2 Labs' world-leading expertise in optical transmission with Net Insight's switching and networking expertise," contends Tomas Duffy, CEO of Net Insight. "This acquisition will give us more complete and enhanced product portfolio in our targeted market segments, Triple Play, and Broadcast Media Networks."