Bay Microsystems, the leader in high performance packet processing solutions delivering high quality voice, video and data services, announced a few weeks ago it has reached profitability, becoming the first high-end network processor company to ever achieve this milestone. Additionally, Bay announced record revenue growth and its first acquisition, entering a definitive agreement to buy privately-held Parama Networks, a Santa Clara, CA-based fabless semiconductor company that specializes in System-on-a-Chip solutions for the telecommunications transport equipment market. The merger is expected to close later this month, and terms were not disclosed.

Bay Microsystems is actively partnering with the US federal government and with commercial OEMs, enabling the world's most demanding broadband networks, and the company expects to continue its record revenue growth. As part of its strategy to complete the acquisition of Parama, Bay has raised additional capital from new and existing investors, securing a Series D round of $8.4 million.

"Achievement of profitability is a major milestone in the growth of our company, and is truly a testament to the dedication, persistence and excellence of Bay's entire staff," said Chuck Gershman, president and CEO of Bay Microsystems. "With the acquisition of Parama Networks, we are continuing this growth. Parama's products and technology synergistically enhance our Intellectual Property and product portfolio, with the addition of the highest level of integration in switching and framing technologies in the industry."

"With our mutual emphasis on extreme levels of integration, state-of-the-industry performance, and ultra-high channelization, the merger of Bay and Parama will meet our customers' demands for cost sensitive, compact, innovative, and scalable network element solutions," said Hemant Bheda, president and CEO of Parama Networks.

Bay Microsystems will support Parama's complete family of "ADM-on-a-Chip" devices and has already begun supporting existing customer designs.

Bay's Internetworking Processor family is the heart of solutions that can mediate, aggregate, switch and transport voice, video and data traffic across network domains including LAN, SAN and WAN. These solutions are achieved through the family's unique protocol agile processing capabilities. This processing empowers maximum line rate operation for interworking and mediation of IPv4, IPv6, Ethernet, GFP, SONET, Fibre Channel, ATM, Frame Relay, and other protocols simultaneously. The family includes Montego®, the industry's only OC192c/10G processor capable of classification, policing, segmentation and reassembly, and traffic management at wire rate. Biscayne™ is a programmable classification processor that can parse, classify and police packets and cells at rates up to 16 Gbps, at minimum packet size regardless of traffic patterns.

Parama Networks is a fabless semiconductor company specializing in System-on-a-Chip solutions for the telecommunications transport equipment market. The company was funded in March 2001 with support from Azure Capital Partners, Cross Bridge Ventures, Menlo Ventures, Network Angel Capital and Sprout Group. Parama’s unique products enable equipment vendors to deliver innovative products with faster time to market, and reduced cost, power and size. Led by a management team that has many years of experience in system-on-a-chip product development, SONET/SDH system design, software development, and marketing, the company has received 4 U.S. Patents and has 21 others pending.