Lucent Technologies: corporate venture partnership

MURRAY HILL, N.J. – Lucent Technologies (NYSE:LU) and Coller Capital of London today announced that they have created a new venture capital partnership named New Venture Partners II LP (NVP II). NVP II will own and manage the former Lucent New Ventures Group (NVG) portfolio of businesses, which has its roots in Lucent’s famed R&D arm, Bell Labs.

Under the terms of the agreement, Lucent sold 80 percent of its equity stake in the NVG portfolio to Coller Capital, an international specialist investment manager.

The core Lucent NVG team will leave Lucent and move to NVP II to manage the portfolio going forward, and Lucent will retain a 20 percent limited partner’s interest in NVP II.

NVG has served as the venture development arm for Lucent, taking technology innovations from Bell Labs and growing them into independent companies. Although NVG was established in 1997, many of the 27 companies in the portfolio can trace their technology heritage back to the 1980s or early 1990s.

The portfolio includes such companies as Celiant, the largest supplier of wireless base station amplifiers in the United States; iBiquity Digital, whose technology allows the transformation of AM radio broadcast to FM audio quality, and FM to CD quality; and Intrado, a leading provider in North America of systems and services for network databases that route emergency 911 calls to public safety answering points.

“Our New Ventures Group has a solid track record of giving Bell Labs technologies that lie outside Lucent’s core set of offerings the opportunity to flourish as independent ventures,” said Bill O’Shea, president, Bell Labs and executive vice president, Corporate Strategy and Marketing.

“The creation of an independent company to manage this portfolio will better position the portfolio companies for future success and growth, while allowing Lucent to focus its management attention and resources on innovations for our large service provider customers. We decided to partner with Coller Capital because they responded quickly and clearly understood how to align the interests of Lucent, Coller Capital and the NVG management team.” In addition to retaining a 20 percent interest in the new partnership, Lucent also will have the opportunity to continue to work with NVP II on future investments.

“Over the last 18 months, we have analysed more than 100 opportunities to buy into private equity portfolios but walked away from them all, just waiting for an opportunity like this,”¬†said Jeremy Coller, chief executive of Coller Capital. “I believe that we have joined forces with one of the top corporate venturing teams in the United States. This is the first high-quality portfolio of technology stocks that, in our view, has come up for sale since the sector slumped last year. These companies give us a good spread of risk, encompassing software, communications, storage and other activities. They also serve a wide variety of customers in different countries and several of them are mature businesses with substantial revenues.”

“The combination of Lucent’s continued presence and Coller Capital’s experience in private equities and technical expertise bring tremendous value to the new firm,” said NVP II managing partner Tom Uhlman. “Initially, NVP II will focus on helping our ventures yield significant value for their shareholders. In the not too distant future, we plan to build on our unique corporate and venture experience to create new deal flow from institutional laboratories and undervalued corporate technology assets.”