On December 20, 2006 Ericsson declared that the company had signed an agreement under which Ericsson would acquire Redback Networks, atelecommunications equipment company. The deal was worth approximately $ 2.1 billion.
Redback Networks specialized in hardware and software used by Internet Service Providers (ISPs) to manage broadband services.
At the time of the acquisition, Redback employed about 800 people and had over 700 carrier customers in more than 80 countries. Redback had a strong position in multi-service edge routing technology, which helped carriers deliver broadband, telephone, TV and mobility services over internet-based infrastructures. Fifteen of the top 20 telephone carriers worldwide used Redback's technology, including broadband routers to manage IP-based data, voice and video services. The company was founded 1996 in San Jose, CA the heart of Silicon Valley and listed on NASDAQ in 1998.
In a press-release, Carl-Henric Svanberg, president and Chief Executive Officer, Ericsson, said: "The combined strengths of both companies will create significant value for customers and shareholders and exciting opportunities for employees. The pace of IP deployment is accelerating as operators move to all-IP converged networks, in which quality of service requires increasingly intelligent routers with higher capacity."
Ericsson saw many expansion opportunities upgrading networks in the future, leveraging Ericsson's ongoing research and development initiatives, broadband product portfolio and the well-established market presence of Redback's router technology and IP competence.
After the transaction, Redback became a wholly owned subsidiary of Ericsson, and became a cornerstone of Ericsson's IP routing platforms and solutions. Redback retained its management team and Ericsson maintains Redback's offices and facilities in San Jose, CA and elsewhere.