Cisco To Acquire Telebit's MICA Technologies via Cash Merger
Accelerates dial market offerings through digital modem
personnel and technology
SAN JOSE, Calif. - July 22, 1996 - Cisco Systems, Inc. today announced it
has signed a definitive agreement to acquire
Telebit Corp. and
its Modem ISDN Channel Aggregation (MICA) technologies for $200 million.
Approximately 50 MICA development, product management and customer-support
personnel will become the Dial Technology Division within Cisco's
Access
Business Unit and will be located in Cisco's Chelmsford, Mass.,
facilities.
The division will help Cisco integrate the advanced features of MICA's
high-density digital modem technology currently under development into
current and future Cisco products, including the
Cisco 2509-2511 access
servers and the
AS5200
Universal Access Server.
For customers seeking scalable dial solutions, MICA technology combined
with Cisco IOS(tm) software and wide-area network switching is expected to
provide a scalable, secure network connection using managed modem
technology. Cisco IOS
software supports the multimedia requirements of
both LAN and WAN protocols, optimizing WAN services for controlling
intranetwork access.
By providing higher dial densities, product flexibility, faster
time-to-market and investment protection for both new and existing
customers, MICA technology enables the simultaneous support of remote
access users through both analog modems and ISDN devices. Digital modem
technology offers "any-to-any" multisession functionality for all v.34bis
and lower speed data modem standards while supplying value-added functions
for ISDN channels, including compression, rate adaptation and framing
assist for such protocols as PPP, SLIP or HDLC.
Under the terms of the agreement, Telebit will sell its analog modem
business, NetBlazer and MicaBlazer products and other assets and
liabilities to a new entity formed via a Telebit management buyout, for a
$31.5 million promissory note and $3.5 million in redeemable preferred
stock. Simultaneously, under the definitive agreement, Cisco will purchase
the remaining Telebit Corp., which will consist of Telebit patents, MICA
intellectual property and MICA personnel, and will assume the $35 million
financing for the management buyout.
Cisco will pay approximately $200 million in cash, net of option proceeds,
which will result in Telebit shareholders receiving $13.35 per share.
Cisco expects the agreement will result in a one-time charge against
after-tax earnings of between 22 and 25 cents per share in its first fiscal
quarter of 1997 as a write-off of in-process research and development. The
transaction is expected to be completed by the end of October 1996 and is
subject to various conditions, including clearance under the
Hart-Scott-Rodino Antitrust Act and approval by Telebit stockholders.
The new entity created by the management buyout will assume the name
Telebit Corp., and James D. Norrod will be president and CEO. The company
intends to license Cisco's newly integrated MICA development efforts and
incorporate it into various LAN server technologies, including Novell
NetWare, Microsoft NT and several UNIX-based server platforms.
Telebit (NASDAQ:TBIT), of Chelmsford, Mass., is an innovator in developing
remote-access and digital modem technology for computer networks.
Telebit's products are used worldwide in commercial applications. The
company has offices in the United States, Europe and Asia, and markets its
products worldwide through value-added resellers, wholesale distributors
and OEMs. Company information is available at World Wide Web site
http://www.telebit.com.
Cisco Systems (NASDAQ: CSCO) is the leading global
supplier of
internetworking
solutions for corporate intranets and the global Internet.
Cisco's products, including routers, LAN and ATM switches, dial-up access
servers and network management software, are integrated by the
Cisco IOS
software to link geographically dispersed LANs, WANs and IBM networks.
Company news and product/service information are available at World Wide
Web site
http://www.cisco.com.
Cisco is headquartered in San Jose, California.
# # #
Telebit and NetBlazer are registered trademarks, and MICA, MicaBlazer and
Granite are trademarks of Telebit Corporation. Cisco IOS and Cisco Systems
are a trademarks, and Cisco and the Cisco Systems logo are registered
trademarks of Cisco Systems, Inc. All other trademarks, service marks,
registered trademarks or registered service marks mentioned in this
document are the property of their respective owners.
Posted: Mon Jul 22 09:16:44 PDT 1996
