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

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

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags Mergers and acquisitionsbusiness issuesNetworkingtelecommunicationalcatel-lucentGovernment use of ITLGS Innovations

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Stephen Lawson

IDG News Service
Show Comments

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Jack Jeffries

MSI GS75

As the Maserati or BMW of laptops, it would fit perfectly in the hands of a professional needing firepower under the hood, sophistication and class on the surface, and gaming prowess (sports mode if you will) in between.

Taylor Carr

MSI PS63

The MSI PS63 is an amazing laptop and I would definitely consider buying one in the future.

Christopher Low

Brother RJ-4230B

This small mobile printer is exactly what I need for invoicing and other jobs such as sending fellow tradesman details or step-by-step instructions that I can easily print off from my phone or the Web.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?