Follow Us

We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message

Alcatel sells federal technology unit for US$200 million

As a partner company under private owners, the former Bell Labs team says it will be able to go after more markets

Article comments

LGS Innovations, a company formed during the Alcatel-Lucent merger to supply technology to the U.S. government, has been sold to a pair of U.S.-based investment companies for about US$200 million.

Alcatel-Lucent created LGS as part of the 2006 merger of France's Alcatel and U.S. communications vendor Lucent Technologies. Under requirements from the Committee on Foreign Investment in the United States (CFIUS), the companies had to form LGS as a separate entity in order to continue doing classified work. It's being acquired by private equity firm Madison Dearborn, based in Chicago, and holding company CoVant, based in McLean, Virginia. All of LGS's nearly 700 employees will transition to the new ownership, the companies said.

As part of Alcatel-Lucent, LGS has operated under a Special Security Agreement (SSA) meant to keep sensitive U.S. technologies out of the hands of the foreign-owned parent company. This has made it hard for the company to carry out some kinds of business, according to LGS CEO Kevin Kelly.

"The information-sharing rules are extraordinarily burdensome," Kelly said. "Information from Alcatel could go in, but nothing could go back the other way."

It will be easier to get things done as a separate company in a partnership with Alcatel-Lucent, Kelly said. The sale will help LGS address markets and customers that were harder to work with before. Those may include state and local governments in the U.S., public safety agencies, foreign governments and some businesses. LGS hopes to play a role in a planned 4G public-safety network in the U.S.

LGS's patented innovations include ones that could be useful for both governments and enterprises, such as data compression technologies and network reconnaissance to gauge performance and detect rogue devices, Kelly said.

LGS traces its roots to the 1940s and a team that did military and other government work for Bell Labs, the brain trust of the former Bell System monopoly. Among the projects it worked on was Telstar, the first orbiting communications satellite, launched in 1962, Kelly said.

Alcatel is divesting assets and cutting jobs as part of a restructuring it says will bring the company back to profits by 2015.

Stephen Lawson covers mobile, storage and networking technologies for The IDG News Service. Follow Stephen on Twitter at @sdlawsonmedia. Stephen's e-mail address is stephen_lawson@idg.com



Share:

More from Techworld

More relevant IT news

Comments



Send to a friend

Email this article to a friend or colleague:

PLEASE NOTE: Your name is used only to let the recipient know who sent the story, and in case of transmission error. Both your name and the recipient's name and address will not be used for any other purpose.

Techworld White Papers

Choose – and Choose Wisely – the Right MSP for Your SMB

End users need a technology partner that provides transparency, enables productivity, delivers...

Download Whitepaper

10 Effective Habits of Indispensable IT Departments

It’s no secret that responsibilities are growing while budgets continue to shrink. Download this...

Download Whitepaper

Gartner Magic Quadrant for Enterprise Information Archiving

Enterprise information archiving is contributing to organisational needs for e-discovery and...

Download Whitepaper

Advancing the state of virtualised backups

Dell Software’s vRanger is a veteran of the virtualisation specific backup market. It was the...

Download Whitepaper

Techworld UK - Technology - Business

Innovation, productivity, agility and profit

Watch this on demand webinar which explores IT innovation, managed print services and business agility.

Techworld Mobile Site

Access Techworld's content on the move

Get the latest news, product reviews and downloads on your mobile device with Techworld's mobile site.

Find out more...

From Wow to How : Making mobile and cloud work for you

On demand Biztech Briefing - Learn how to effectively deliver mobile work styles and cloud services together.

Watch now...

Site Map

* *