Quite Content at Lucent
by Kenneth Klee
The Deal 21 August 2003

Phil Content is thinking small. Not because his employer, Lucent Technologies Inc., has been shrinking - though he has played a significant role in the company's attempts to downsize its way back to profitability. No, Content is thinking micron-small, as befits an officer and board member of the New Jersey Nanotechnology Consortium, a Lucent subsidiary.

Content's work at the consortium - he was appointed in April to develop a new business model - is his latest assignment as a member of Lucent's corporate development department, which he joined in 1999 and has co-headed since 2001. Belgian-born, he came to the telecommunications equipment company from HVB Capital Markets Inc. in New York, where his tasks included helping the big German bank's investment banking unit expand in Latin America.

Is Content glad he made the switch, given the rough ride his industry and his company have been experiencing? "Yes, I'm still very pleased," says Content, who, along with an M.B.A. from Boston University, has an engineering degree (in telecom and armaments) from the Ecole Royale Militaire in Brussels. Content appreciates the chance to work with experts in fields ranging from intellectual property to real estate, as well as the quality-of-life improvement nearly all former Wall Streeters say they enjoy in the corporate world.

"It's nice not to have to call my wife and say, 'I'm not coming home tonight,'" he says.

But the past few years have been seriously hectic ones for Lucent, if not for Content personally. When he came aboard in 1999, the AT&T spinoff was still one of the darlings of what still looked like a telecom boom, rather than a bubble, and multibillion-dollar acquisitions were coming fast and furious. Lucent had built up a corporate development team more than 20 strong - most of them, like Content, coming from Wall Street.

Then in January 2000, Lucent issued the profit warning that was the first sign of deep trouble ahead for the company. Four years, two CEOS and various spinoffs, write-downs and divestitures after Content arrived, a far smaller Lucent - with about 36,000 employees, down from more than 100,000 - recently reported its 13th consecutive quarterly loss. The corporate development staff, meanwhile, is down to seven.

Content was brought in as director of international corporate strategy and business development. He managed the build-out, and then the resizing, of Lucent's international dealmaking efforts. His biggest deal: The May 2000 acquisition of Virginia and Israel-based metro optical networking company Chromatis Networks for $4.5 billion in stock. Alas, by August 2001, Lucent was shutting down Chromatis' operations and writing off much of the purchase price, amid its broader restructuring. But the technology Content acquired (which Lucent had earlier helped incubate with a 7% stake in Chromatis taken by Lucent Venture Partners) still figures in Lucent's products.

In 2001 Content assumed his current duties as co-head of the corporate development department. Sharing the reins with Doug Power, he reports to Lucent's chief strategy officer, Bill O'Shea, and has closed 19 transactions in the period. There was also a very large deal that didn't close but occupied Content for several months: Lucent's proposed merger with France's Alcatel SA, which almost materialized in spring 2001.

Soon thereafter, Content was organizing the divestiture of Lucent's manufacturing facilities, a project he found especially interesting. He led the team that managed the transfer of operations in Oklahoma City and Columbus, Ohio, to Toronto-based Celestica Inc., an electronics manufacturing services company. The $570 million deal made Celestica the main manufacturer for Lucent's switching, access and wireless networking products, and included a five-year supply agreement valued at up to $10 billion. What made it challenging? "You want these guys to have the necessary intellectual property so they can manufacture the box for you," Content says. "But you don't want them to use the same property to manufacture for your competitors."

Content worked with J.P. Morgan on the Celestica deal. Overall, though, he says that with the dealmaking skills Lucent has built in-house, the company is employing investment bankers less - calling them in on larger deals, sometimes, or during especially busy periods.

Lucent continues to look at acquisitions, Content says. But at the moment, more than half his time is devoted to making the Nanotechnology Consortium self-sustaining. The consortium aims to help companies commercialize nanotechnology ideas and expects to work with a variety of partners and customers, including government agencies, universities and companies in industries ranging from aerospace to communications to biotechnology. Its nucleus is the famous Bell Labs nanofabrication facility in Murray Hill, N.J. For a former engineering student from Belgium, it's a pretty interesting place to work.

Doing deals at Lucent Technologies Inc.
Philippe M. Content

Title: Director, corporate strategy and business development
Age: 44
Education: M.B.A. in finance, Boston University; master of engineering (telecom and armaments-ballistics), Ecole Royale Militaire, Brussels
Experience: Lucent Technologies Inc.'s co-head of corporate development since 2001. Joined Lucent in 1999 to run international corporate development. From 1989 to 1999 was an investment banker with Banque Bruxelles Lambert in Belgium; Banexi International in New York; and HVB Capital Markets Inc. in New York. Also worked for the Belgian Ministry of Defense and served as a company commander in NATO.