Nortel To Buy DiamondWare For $10M

August 22, 2008 11:42 a.m. EST

Ottawa, Ontario (AHN) - Canadian telecom hardware maker Nortel Networks announced Thursday that it plans to buy DiamondWare, an Arizona-based multimedia imaging software firm, to boost its virtual web and voice communications products.

The acquisition is the third for Nortel in August. DiamondWare will be purchased at an estimated cost of $10 million: $7 million in cash for assets and employee-related costs, and $3 million, which will be based on the company's performance in the next 40 months.

Technology developed by DiamondWare is used in computer gaming and military communications as well as by telecommunication companies and their suppliers. Nortel will use the technology to improve its multimedia, voice conferencing, and web-phone products and services.

Nortel recently made several other small acquisitions: Pingtel Corp., a designer of software-based communications technology, from Bluesocket Inc. for an undisclosed amount; and Novera Optics, a U.S.-Korean joint venture on broadband optical access technology for $18 million.