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JERUSALEM — Technology companies – start-ups and more mature companies alike — be on the lookout for Zaki Rakib knocking on your door. Engineers, too. The company he heads, Santa Clara-based Terayon Communication Systems, has been purchasing companies in Israel and plans to almost double its Israeli staff.

Terayon, which supplies broadband networking solutions for advanced broadband voice, data and video services, is looking to acquire start-up companies in the fields of wireless technology and digital subscriber line (DSL), Rakib said. It's also interested in a series of mergers, joint ventures and investments with more mature Israeli partners, perhaps even public companies.

At present, Terayon, which has a market capitalization of $2 billion, employs about 250 people in Israel, but by the end of this year, Rakib hopes this number will have risen to at least 400 — some 40 percent of the company's total projected workforce.

In 1999, Terayon purchased a number of Israeli companies including Telegate, Imedia and RADwiz in deals totaling $460 million. Earlier this year, the company also purchased ComBox, a specialist in broadband data systems, in a $100 million share swap. In August, Terayon purchased the Fremont-based Mainsail Networks, a privately held company that designs, develops and markets integrated access solutions for next-generation broadband networks.

Last month, Terayon shipped its millionth cable modem.

Rakib, 41, who was born in Egypt and immigrated to Israel at the age of 13, founded Terayon with his brother, Shlomo, in 1993. He had moved to the United States a few years earlier after Helios, the Israeli start-up he was then working for, was purchased by Cadence, a U.S. company.

Terayon has come out of nowhere. In 1997 the company had no sales. In 1998 sales reached a figure of $32 million. In 1999, the company leaped to $97 million. Revenue for the second quarter of 2000 grew 382 percent to $92 million, from $19.1 million in the second quarter of 1999. Revenues for the six months ending June 30, 2000 increased to $151.4 million from $35.0 million for the same period last year.

Merrill Lynch, in a report issued earlier this year, says it expects the cable modem equipment market to grow by 60 percent annually to $4.1 billion in 2003. "We believe the company's vertical integration and intellectual property will enable it to gain share in the cable modem market," the report stated.

Rakib says that Nasdaq-traded Terayon's goal is to create a Cisco-like operation in the field of broadband.

"We want to follow what Cisco has done," he said. "We intend to expand through the combination of annual growth and acquisitions. Apart from carrying out our own R&D, we also want to build a culture that enhances the process of acquisitions and welcomes the creation of micro-cultures so that we can deliver solutions when the market needs them."

He added that the company is now expanding its portfolio in two different directions within the broadband field. Terayon plans to focus on media — not just data, but video and voice; and also hopes to offer solutions over copper and wireless.

Rakib says he is particularly interested in developing his business in Israel for a number of reasons: firstly, because of his own connection and understanding of the business culture; secondly, because Israeli companies are often cheaper than their U.S. counterparts. Although they are hot on technology, they often lag behind substantially in the field of sales and marketing.

Finally, he says: "Israel is full of talent. The growth in the telecommunications sector is almost perpetual and having access to a team of Israelis is a big advantage."

Rakib says that the company is now planning to locate all its Israeli acquisitions in the Azrieli Center in Tel Aviv. He will also have his own offices there as he expects to visit Israel every month.

"In the long term we plan that half of our R&D workforce will come from Israel and the rest from the U.S.," he said. In the meantime Rakib is still on the prowl for more companies.

"The puzzle we have created for ourselves in the field of broadband is not yet completed and we are looking for companies to fill in the gaps. Aside from technical acquisitions we must also acquire customer base if we are to gain in scale and size. It's not enough just to have the technology, we also need the legs in the street. There are enough companies in Israel that fit this profile."