Mahshad Koohgoli, CEO of Nimcat Networks (Darren Brown, OBJ).

Ottawa's Nimcat Networks, a developer of Internet Protocol software, has been bought by Avaya.

Avaya, based in Basking Ridge, N.J. and trading on the NYSE, will pay $46 million in cash for Nimcat, which raised $7.55 million in venture capital in 2003 and 2004.

Avaya said its research and development plans include incorporating Nimcat Networks software into its IP telephony offers. This process is expected to take up to 12 months, after which Avaya said it will release its first integrated Nimcat Networks-based product.

Nimcat's plug-and-play software is embedded directly into individual IP phones. It includes the most frequently used features and applications, including voice mail, conferencing and auto-attendant. Installation involves simply plugging the IP phones into the same data network used by office personal computers. The phones automatically find each other, connect to each other and initialize their features. Each phone has its own software and back up data for other phones, so if one phone fails the others continue to work.

Nimcat has about 35 employees in Ottawa.

"By joining Avaya, Nimcat Networks will have access to a larger market and we become contributors to Avaya's global research and product development efforts," Nimcat CEO Mahshad Koohgoli said in a statement. "Our technology will play an integral role in further communications innovations from Avaya. We are excited about being part of a company that shares our vision of smart devices helping a broader range of businesses integrate the benefits of IP telephony into their operations."

Avaya expects to continue selling Nimcat Networks' software to other equipment manufacturers and to support existing Nimcat customers.

Nimcat as founded in 2002 and has enjoyed a rapid ascent in the burgeoning VoIP market. It has garnered a fistful of awards, including being selected as one of 12 "Startups to Watch" earlier this year by the Ottawa Business Journal.

At the time, Mr. Koohgoli told the paper "We had a dizzying year in 2004, moving on product development, marketing, partnership and sales activities. In the first working day of 2005, I promised the Nimcat team that the frantic pace of activity and successes will continue in 2005. The company has a momentum, we have a unique product, and like every other startup we continuously race against time. "

Avaya designs, builds and manages communications networks and says it serves more than one million businesses worldwide, including more than 90 per cent of the Fortune 500.