LEXINGTON, Mass. -- Arbor Networks, a leading provider of secure service control solutions for global business networks, announced today that it has signed a definitive agreement to acquire Ellacoya Networks, a leading provider of carrier-class broadband service optimization solutions. Terms of the transaction were not disclosed.

Arbor Networks protects more than 70% of the world’s service provider networks from security threats such as DDoS attacks, botnets and worms as well as network issues such as traffic and routing instability. Arbor combines pervasive, network-wide visibility with deep applications insight to give customers the business intelligence necessary to protect and manage their networks, and to create and deploy new revenue-generating services. Ellacoya is a leader in deep packet inspection (DPI) solutions deployed at the broadband edge and peering links in some of the world’s largest Tier 1 service provider networks, providing precise visibility into traffic along with the ability to prioritize traffic on a per-subscriber and per-application basis. In addition, the Ellacoya solution is used to deliver new products and services, such as IPTV, digital video and on-demand quality-assured broadband services.

Arbor believes that the acquisition positions the company to take advantage of a significant market opportunity as service providers place increased importance on traffic and service management in order to efficiently and securely deliver new, revenue-generating IP services. The company estimates that the combination of the traditional Infrastructure Security and Service Control and DPI markets creates a $750 million market opportunity in 2008, which should grow to $1.5 billion by the end of this decade.

The combined product family will enable service providers to detect and mitigate the full range of network-based attacks and extend protection from the service provider core down to the broadband edge. Additionally, allowing a service provider to employ both flow-based and DPI-based technologies will enable measurement and protection of the entire service delivery infrastructure, without the cost of deploying inline devices throughout the entire network. This powerful combination will improve network performance and customer satisfaction while enabling service providers to deliver the full-spectrum of IP-based business lines, including wireless, wireline, IPTV and VoIP solutions.

“With the addition of the Ellacoya technology and customer base, Arbor Networks will be in a unique position to deliver both broad and deep visibility to protect and manage networks worldwide. We believe that customers will realize enormous value from this strategic and best-in-class combination,” said Jack Boyle, chief executive officer of Arbor Networks. “Through Ellacoya, Arbor Networks is adding a team of professionals with exceptional skills and a culture that is highly complementary.”

Arbor Networks Inc.