Redback Networks to Buy Siara Systems

Redback Networks, a small Internet equipment maker with a big stock market value, is buying Siara Systems for nearly $4.7 billion in stock--another huge payday for a little company with promising technology to speed up the Web. Closely held Siara, based in Mountain View, Calif., is developing new semiconductor designs, fiber-optic techniques and software to improve the communications networks that make up the Internet. Sunnyvale, Calif.-based Redback makes software and equipment for providers of high-speed Internet access via cable-TV systems and DSL, or digital subscriber line, a continuous Web connection over a regular telephone wire. Under the agreement, Redback will issue 31.3 million shares to acquire Siara from its investors. Redback went public six months ago at $11.50 per share, adjusted for a stock split. On Monday, it surged $13.50 to close at $150 on Nasdaq. Redback plans to maintain the current structure of Siara’s product development team, which consists of nearly 170 engineers. Redback also plans to retain Siara’s software development facility in Vancouver, Canada.