CAMBRIDGE, Mass.; PALO ALTO, Calif.; and NEW YORK - General Catalyst Partners, a Cambridge-based private equity firm, and Accel Partners, a Palo Alto-based venture capital firm, today announced that they have signed a definitive agreement to partner with management to acquire Cambridge-based BBNT Solutions LLC (BBN) from Verizon.
For more than 50 years, the BBN name has been synonymous with technical innovation and leadership. The company was founded in 1948 by MIT professors Richard Bolt and Leo Beranek, along with Robert Newman, with a vision of starting a small, acoustical consulting firm. From the consultation for the design of the acoustics of the United Nations General Assembly Hall in 1948 to implementing and operating ARPANET (the forerunner of today's Internet) in 1969, BBN has pioneered numerous firsts, including the first implementation of packet switching (1969), the first router (1976), and the first network e-mail (1971), which established the @ sign as an icon for the digital age.
"We are privileged to partner with management to invest in BBN, an organization that has been so instrumental to innovation. BBN has made an enormous and successful footprint delivering advanced technology by attracting the best and brightest engineers, scientists and researchers in the world," said David Fialkow, managing director, General Catalyst Partners. "We are thrilled to invest with these pioneers and provide them with the resources to grow their core business as well as commercialize their technologies."
"Accel believes in building technology companies that define new markets, and BBN has led some of the most fundamental communications technology innovations of the past several decades. Arpanet, BBNPlanet, routing -- their track record is outstanding," said Jim Breyer, managing partner, Accel Partners. "At the same time, we are really investing in the team. One rarely finds people with the passion, long-term commitment, integrity and creativity exhibited by everyone at BBN. These are simply people we wanted to be in business with."
Tad Elmer, who has been president of BBN since 1999, will continue to lead the company in that capacity. He has been with the company for more than 25 years. Previously, he was leader of the Newport, R.I., office, which focuses on underwater simulation and complex real-time systems.
"This partnership allows BBN to focus on the deeply held values of its entrepreneurial roots," said Elmer. "Credit goes to everyone who made it possible: Verizon for the good stewardship they've provided BBN over the last few years; General Catalyst Partners and Accel Partners for having the vision to recognize and value BBN's tremendous capacity for innovation; and especially the BBN staff who focus resolutely on our customers' problems and deliver outstanding results."
BBN continues to pioneer innovative technologies and win accolades for its achievements. In 2003, BBN began operating the world's first quantum cryptographic network, demonstrating a fully operational capability for protecting Internet traffic through quantum cryptography. Unlike traditional network security methods that rely on encrypted keys or complex algorithms that can be intercepted or decoded, the quantum cryptographic network's security guarantees are based on fundamental and immutable principles of quantum physics.
In November of last year, one of BBN's founders, Dr. Leo Beranek, was awarded the National Medal of Science, the nation's highest honor for science.
"The men and women of BBN Technologies have made great contributions to our country, this industry and Verizon," said Mark Wegleitner, Verizon senior vice president and chief technology officer. "I am sure that BBN and its great staff will continue to break new ground in technology, as they have done for the last half century."
Wegleitner added that the sale of BBN is part of Verizon's ongoing review of assets that the company should retain or sell as part of the company's overall strategy.
About BBNT Solutions LLC
BBN Technologies was established as Bolt Beranek and Newman Inc. in 1948. From its roots as an acoustical design consulting firm, to the implementation and operation of the ARPANET -- the forerunner of today's Internet -- to the development of the first network email, which established the @ sign as an icon for the digital age, BBN Technologies provides the same technical expertise and innovation to both government and commercial customers today. These areas of expertise include: quantum computing, system integration; distributed, collaborative applications; speech recognition; language understanding; wireless and satellite networking; network architecture and management; information security; structural acoustics; sensor signal processing; and real-time, multi-processor systems. BBN has more than 600 employees in offices across the US.
About Accel Partners
Founded in 1983, Accel Partners has a history of excellence and innovation in the venture capital business. The firm is dedicated to partnering with outstanding management teams to build world-class Internet, software, and communications companies. With over $3 billion under management, Accel Partners has a long legacy of helping entrepreneurs build highly successful companies. Accel portfolio companies have completed IPOs that have created well over $100 billion in market capitalization. Accel has a history of backing category-defining companies, which include Actuate, Agile Software, Foundry Networks, Macromedia, Portal, Polycom, Uunet, RealNetworks, and Veritas. For more information, visit the Accel Partners web site at www.accel.com.
About General Catalyst Partners
General Catalyst Partners is a private equity firm that invests in exceptional entrepreneurs and technical founders who are building the software solution and technology platform companies that will lead innovation and transform industries. Founded in 2000, General Catalyst Partners leverages its principals' extensive operational, business development and technological expertise to provide portfolio companies with a catalyst for success through business building and partnership development assistance. General Catalyst is headquartered in Cambridge, Mass. For more information, please visit www.generalcatalyst.com.
A Fortune 10 company, Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services, with approximately $68 billion in annual revenues. Verizon companies are the largest providers of wireline and wireless communications in the United States. Verizon is also the largest directory publisher in the world, as measured by directory titles and circulation. Verizon's international presence includes wireline and wireless communications operations and investments, primarily in the Americas and Europe. For more information, visit www.verizon.com.
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