Tellabs to be acquired by Marlin Equity Partners for $891 million in cash

Tellabs, once a high-flying telecom and optical networking equipment maker, cashing in on the networking boom of the late 1990s, announced that it was being acquired by Marlin Equity Partners for $891 Million in cash -- that is less than quarterly sales it logged during the heyday of telecom.

Given that Tellabs had about $500 million in cash, I am guessing this deal is a lot cheaper than it seems, perhaps even a bargain. The company, like many high flyers of the 1990s bubble, was hit hard by two major trends. First, the lack of growth in new demand because of the turbocharged build-outs during the bubble. And second, the massive consolidation in the telecom carrier market put too much power in the hands of network operators. The emergence on Chinese players -- ZTE and Huawei -- hasn’t helped matters either, and Tellabs’ own attempts to diversify (buying mobile core network equipment maker WiChorus, for instance) haven’t paid out. All those macro changes have reduced the company to a shell of its former self.