Alcatel-Lucent to acquire Tropic Networks

SAN JOSE, Calif. — Alcatel-Lucent has agreed to buy all assets and intellectual property of Tropic Networks Inc., a Canadian startup specializing in reconfigurable optical add-drop multiplexer systems.

Tropic had merged with two Canadian oil companies, Chamaelo Exploration Ltd. and Tournament Energy Ltd., as a means of raising close to $10 million in operating capital.

Alcatel-Lucent first approached Tropic when Alcatel joined a $33 million round of financing for Tropic in 2004. That round was followed by a $48 million venture-led round, bringing total funding close to $200 million. The difficulty of raising more capital after five rounds prompted Tropic's deal with the oil companies.

WaveTracker WDM and Roadm capabilities now will be integrated into Alcatel-Lucent optical transport products. In January, Tropic claimed the use of WaveTracker along with tunable transponders would help carriers solve chromatic dispersion problems.

Kevin Rankin, chief executive of Tropic, said more than 100 employees of his company remain in Ottawa, and they will become part of Alcatel-Lucent, working to integrate Roadms into the larger company's product line. Rankin said discussions with Alcatel had taken place even before its merger with Lucent. An important point for startup Roadm manufacturers at both the component and system levels, Rankin said, is that "a startup can gain share of mind, but it's much harder to gain share of dollar. You need a big company playing at least a collaborative role in order to make the important sales relationships with customers."

Terms of the deal were not disclosed, though sources in Ottawa, Tropic's headquarters, said the company had let go many employees prior to Alcatel-Lucent's acquisition.