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 governmentMergers 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

Cool Tech

Toys for Boys

Family Friendly

Stocking Stuffer

SmartLens - Clip on Phone Camera Lens Set of 3

Learn more >

Christmas Gift Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Aysha Strobbe

Microsoft Office 365/HP Spectre x360

Microsoft Office continues to make a student’s life that little bit easier by offering reliable, easy to use, time-saving functionality, while continuing to develop new features that further enhance what is already a formidable collection of applications

Michael Hargreaves

Microsoft Office 365/Dell XPS 15 2-in-1

I’d recommend a Dell XPS 15 2-in-1 and the new Windows 10 to anyone who needs to get serious work done (before you kick back on your couch with your favourite Netflix show.)

Maryellen Rose George

Brother PT-P750W

It’s useful for office tasks as well as pragmatic labelling of equipment and storage – just don’t get too excited and label everything in sight!

Cathy Giles

Brother MFC-L8900CDW

The Brother MFC-L8900CDW is an absolute stand out. I struggle to fault it.

Luke Hill

MSI GT75 TITAN

I need power and lots of it. As a Front End Web developer anything less just won’t cut it which is why the MSI GT75 is an outstanding laptop for me. It’s a sleek and futuristic looking, high quality, beast that has a touch of sci-fi flare about it.

Emily Tyson

MSI GE63 Raider

If you’re looking to invest in your next work horse laptop for work or home use, you can’t go wrong with the MSI GE63.

Featured Content

Product Launch Showcase

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?