Turin, Force10 to merge

<p>Turin Networks, one of the survivors of the shakeout in Sonoma County's Telecom Valley, is merging with a San Jose company in a move that could help both businesses ride out a slump in the networking equipment sector.</p><p>Turin, which makes technology for wireless and broadband carriers, announced an agreement Monday to merge with Force10 Networks in March.</p><p>The combined business -- called Force10 Networks Inc. -- will be headquartered in San Jose but it will keep the Petaluma operation, Turin spokesman Kevin Wade said.</p><p>"There will be no change in the near or intermediate future," Wade said. Turin has about 300 employees worldwide, including 150 at its Petaluma headquarters.</p><p>Terms of the all-stock merger weren't disclosed. Turin CEO Henry Wasik will lead the new business, while Force10 CEO James Hanley will run field operations.</p><p>The deal makes sense because it creates a larger company that's better able to compete in a tough market for telecommunications equipment, said Michael Howard, analyst at Infonetics Research, a Silicon Valley consulting firm.</p><p>"This is a good move for both companies," Howard said. "The bigger you are, the more service providers buy from you."</p><p>The slumping global economy has forced other telecom suppliers to consolidate as their customers spend less on network upgrades or expansion.</p><p>"We believe spending will be flat or slightly down this year," Howard said. Still, demand for network equipment will grow in the long term, he said.</p><p>"The world depends on cell phones and broadband Internet," Howard said. "They're not going away."</p><p>Privately held Turin makes technology that helps carriers deliver voice, video and data over wireless and wireline networks. It's focused on wireless backhaul, converged access and carrier ethernet, a fast-growing technology that boosts efficiency of broadband networks.</p><p>San Jose-based Force10, also privately held, sells switching, routing and security technology for large companies' data centers.</p><p>The merger gives Turin's customers better access to Force10's technology, Wade said.</p><p>"We complement one another," he said. "We can take these products from the enterprise to service providers."</p><p>The combined company will have about 1,300 customers, compared to Turin's 600. It will have 600 to 700 employees.</p><p>"Strategically, the merged company will be the only private networking company that is a leading player in three of the fastest-growing segments of the networking market," according to Wasik.</p><p>Turin also operates research and development facilities in Boulder, Colo., Dallas, Boston and Shanghai. There could be some future consolidation at those facilities, but no layoffs are planned in Petaluma, Wade said.</p><p>Force10 also has a research center in Chennai, India.</p><p>Founded in 1999 by Telecom Valley pioneer John Webley, Turin was part of the second wave of startups that earned Sonoma County a reputation as a center for development of powerful technology to move data and video over telephone networks. The company has raised about $250 million in venture capital, making it one of the best-funded startups since the heyday of Telecom Valley in the late 1990s.</p><p>The company doesn't disclose revenues but industry observers estimate its annual sales at around $60 million.</p><p>Last year, Turin acquired Colorado-based Carrier Access for $93 million, expanding its suite of products for service providers.</p><p>It's unclear whether Webley, who played key roles in Petaluma's Advanced Fibre Communications and other networking companies, will sit on Force10's new board. Board membership hasn't been decided, Wade said.</p><p>Force10 also was founded in 1999 and is backed by about $400 million in venture capital.</p><p>You can reach Staff Writer Steve Hart at 521-5205 or steve.hart@pressdemocrat.com.</p>