Alcatel SA, a French maker of telecommunications infrastructure, said Wednesday that it has signed an agreement to buy Petah Tikva company Native Networks for $55 million.

The deal builds on a cooperation agreement that Alcatel and Native Networks signed in February 2003 to develop ethernet technology, which is used in broadband communications networks. With Alcatel's assistance, Native Networks has sold equipment to leading service providers.

Native Network chief executive Rami Hadar said in an interview that the company would remain independent in the first stage following the merger and that it expected to hire new workers.

While he declined to disclose the company's 2004 results, he said it earned millions of dollars from its joint product with Alcatel and that it expected to double its revenue in 2005 and become profitable in early 2006.

Employees will receive some of the money through cashing in on their stock options, although Hadar declined to say how much. The Tmura charitable fund, which solicits donations of company stock from young startups, would also receive a return on its stake in Native Networks, said Hadar. Although he didn't disclose Tmura's holding, it usually gets between 0.5% and 1%.

Native Networks develops metro ethernet technology, which allows telecom service providers to transfer video, voice and data information - known as advanced triple-play services - over existing public infrastructure designed just for voice data. Until now, ethernet technology has mainly been used in private infrastructures, such as in offices.

Alcatel's purchase of Native Networks is the latest in a series of acquisitions of Israeli companies by large multinationals this year. These include Eastman Kodak's purchase of Creo for $980m. and of Orex for $63m., and Intel's buy of Oplus for $100m. last week.

Native Networks was founded in 1999 with seed funding of $1.8m. and has since raised $45m. in total from Israeli, North American, European venture capital funds. These include Tamir Fishman Ventures, which co-led a $15.6M investment round in October 2003. Native Networks has around 70 employees, with 62 in Israel and the rest in the UK.

Tamir has invested a total of $3.3m. in Native Networks and is the second-largest shareholder in the company with an 11.7% interest. Through the sale of Native Networks, Tamir expects to generate a return of around $7.4m.

Aside from Native Networks, Tamir has also been carrying out exits from other start-up companies recently.