US-based Lucent Technologies Inc., a research and development arm of Bell Laboratories, agreed today to buy Chromatis Networks for some $4.5 billion, ending several days of fevered speculation surrounding the negotiations between the two companies, and setting a new record for the purchase of a company originating in Israel.

Lucent said it will pay 78 million of its shares - worth approximately $4.5b., based on Tuesday's closing stock price - for Chromatis, the developer of innovative optical-network technology for metropolitan communications applications. This is by far the highest sum ever paid for an Israeli company, eclipsing the acquisition of DSP Communications by Intel for $1.6b. last October.

The Israeli founders of the company, Orni Petruschka and Dr. Rafi Gidron, as well as Chromatis CEO Bob Barron, will stay on with Lucent and become part of the purchaser's Optical Networking Group.

It is estimated that Petruschka and Gidron each own about 15 percent of the company, meaning that they will realize some $1.35b. apiece as a result of the sale. Neither Petruschka nor Gidron would respond to calls from the press for comment.

After Petruschka and Gidron, the biggest winner appears to be Jerusalem Venture Partners (JVP), a venture-capital firm that had invested close to $10 million dollars in Chromatis during the firm’s early years. JVP's 14% stake is worth only slightly less than the founders' $1.35b., eliciting this response from a JVP spokesperson: "We are extremely pleased, proud, and joyous."

Other investors in the company's two rounds of venture-capital financing include Chase Capital Partners, Crosspoint, ComVentures, Soros Private Equity, Eucalyptus Ventures, and Anschutz Capital. Chromatis had raised $50m. in venture capital in one round of $12m. and another of $38m.