Years of wooing end in merger for tech companies

Ethernet specialists Hatteras, Overture say they're a match, will cut four jobs.

Staff WriterMarch 2, 2011 

Two Triangle technology companies are combining operations to gain a critical edge in the increasingly competitive market for telecommunications equipment.

Hatteras Networks, based in Research Triangle Park, and Overture Networks in Morrisville expect their merger to be completed within three weeks. They plan to boost sales by tapping into each other's customer base, which has minimal overlap.

"We sell a complementary solution," Overture CEO Jeff Reedy said. "As the market is taking off, customers want both solutions."

Mergers typically squeeze savings out of two companies by cutting redundant staff, but Reedy said this merger will eliminate just four executive positions. Reedy promised no other merger-related layoffs and said that he expects to hire staff in the coming year.

Reedy will lead the combined company, which will keep the Overture Networks name. Hatteras CEO Kevin Sheehan is staying on as Overture's president.

Post-merger, Overture will have 110 employees locally, 50 in product development in Texas, and about 40 worldwide in sales and support.

The Triangle is dotted with small entrepreneurial technology businesses, spun off from university projects or formed by engineers and programmers, and chasing their dreams of becoming the next technology miracle story.

The optimum exit strategy for many such ambitious upstarts is to be bought by a technology giant such as Cisco Systems, potentially minting overnight millionaires out of the founders and owners.

For every high-tech company that hits the jackpot, many more carry on for years in relative obscurity, serving a niche market.

Reedy and Sheehan, who have discussed the possibility of a merger for three years, said Tuesday that their privately held companies are coming off record years, positioning both for growth after having trimmed staff during the recession.

The merger better positions Overture as a competitor, an acquisition target or for a potential public stock offering, said John Glushik, general partner at Intersouth Partners, a Durham venture capital firm that invested in Overture.

Hatteras and Overture, both founded in 2000, specialize in Ethernet, a high-speed technology that lets businesses send data and voice over the same line. The two companies have been financed by venture capital firms to develop and build switches and other equipment for the telecom industry.

"This is a natural evolution of getting together after a courting process," Glushik said. or 919-829-8932

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