Intel's Dialogic unit still in limbo

As reported this week, word on the street is that Intel is trying to sell its Dialogic unit, a supplier of computer telephony products, according to sources in the industry. In 1999, Intel acquired Dialogic for approximately $780 million.

Intel declined to comment. "As a matter of policy, Intel does not comment on rumors or speculation. However, I can tell you that communications infrastructure continues to be a large, strategically important business for Intel," according to a spokeswoman for Intel (Santa Clara, Calif.).

Rumors, however, are running rampant that computer telephony product rival Cantata Technology Inc. could become a potential bidder for Dialogic. Cantata (Needham, Mass.) was established in 2006 through the combination of Brooktrout Technology Inc. and Excel Switching Corp.

“Rumors were Cantata, but most people wonder where they would get the money and another was a venture capital group — perhaps spurred by inside management,” according to one source. “The latest rumor, and it's just a rumor, is that whatever deal they had has fallen through.”

If or when Dialogic is sold, Intel plans to keep some but not all of that unit’s employees. Approximately 200 employees from Dialogic were told that they will remain at Intel, while the other 500 will be transitioned to the "new" company, according to a source.

There is no guarantee of a job with the "new" company, the source added. “If someone is not offered a job, Intel will supply a severance package which hasn't been defined yet,” the source added. “Or, if an employee is offered a job but decides to opt out, a package will still be received but at a reduced level.”