Cabletron to Invest $300 Million

Bloomberg News

Cabletron Systems Inc., a networking-equipment maker that is reorganizing into a holding company, said it plans to invest $300 million in other companies in the next two years. "Our plan is to take the cash that we have in the holding company and aggressively invest it in other technology-related companies," said Dan Harding, Cabletron's vice president for business development. Cabletron hopes the investments will help it boost sales and gain access to new technology, Harding said. The plan comes after Cabletron said in February that it's splitting into four units and will sell shares in each within about a year. Last week, the Rochester, N.H.-based company said it will exit or sell some businesses and cut as many as 800 employees, or 18% of its work force. The plan clears up some uncertainty about what will become of the holding company after the reorganization. Cabletron, hurt in recent years by some outdated product lines and competition from Cisco Systems Inc. and others, will make formal announcements on the strategy and specific investments in the next three weeks, Harding said. Its stock fell 41% on Thursday on concern that the split will hurt sales and earnings for several quarters. Shares fell 50 cents to close at $29.50 on the NYSE.

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