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 ithas signed a definitive agreement to acquire
Telebit Corp. andits Modem ISDN Channel Aggregation (MICA) technologies for $200 million.
Approximately 50 MICA development, product management and customer-supportpersonnel will become the Dial Technology Division within Cisco's AccessBusiness Unit and will be located in Cisco's Chelmsford, Mass.,facilities.The division will help Cisco integrate the advanced features of MICA'shigh-density digital modem technology currently under development intocurrent and future Cisco products, including the Cisco 2509-2511 accessservers and the AS5200Universal Access Server.
For customers seeking scalable dial solutions, MICA technology combinedwith Cisco IOS(tm) software and wide-area network switching is expected toprovide a scalable, secure network connection using managed modemtechnology. Cisco IOSsoftware supports the multimedia requirements ofboth LAN and WAN protocols, optimizing WAN services for controllingintranetwork access.
By providing higher dial densities, product flexibility, fastertime-to-market and investment protection for both new and existingcustomers, MICA technology enables the simultaneous support of remoteaccess users through both analog modems and ISDN devices. Digital modemtechnology offers "any-to-any" multisession functionality for all v.34bisand lower speed data modem standards while supplying value-added functionsfor ISDN channels, including compression, rate adaptation and framingassist for such protocols as PPP, SLIP or HDLC.
Under the terms of the agreement, Telebit will sell its analog modembusiness, NetBlazer and MicaBlazer products and other assets andliabilities to a new entity formed via a Telebit management buyout, for a$31.5 million promissory note and $3.5 million in redeemable preferredstock. Simultaneously, under the definitive agreement, Cisco will purchasethe remaining Telebit Corp., which will consist of Telebit patents, MICAintellectual property and MICA personnel, and will assume the $35 millionfinancing 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 againstafter-tax earnings of between 22 and 25 cents per share in its first fiscalquarter of 1997 as a write-off of in-process research and development. Thetransaction is expected to be completed by the end of October 1996 and issubject to various conditions, including clearance under theHart-Scott-Rodino Antitrust Act and approval by Telebit stockholders.
The new entity created by the management buyout will assume the nameTelebit Corp., and James D. Norrod will be president and CEO. The companyintends to license Cisco's newly integrated MICA development efforts andincorporate it into various LAN server technologies, including NovellNetWare, Microsoft NT and several UNIX-based server platforms.
Telebit (NASDAQ:TBIT), of Chelmsford, Mass., is an innovator in developingremote-access and digital modem technology for computer networks.Telebit's products are used worldwide in commercial applications. Thecompany has offices in the United States, Europe and Asia, and markets itsproducts worldwide through value-added resellers, wholesale distributorsand OEMs. Company information is available at World Wide Web sitehttp://www.telebit.com.
Cisco Systems (NASDAQ: CSCO) is the leading globalsupplier ofinternetworkingsolutions for corporate intranets and the global Internet.Cisco's products, including routers, LAN and ATM switches, dial-up accessservers and network management software, are integrated by the Cisco IOSsoftware to link geographically dispersed LANs, WANs and IBM networks.Company news and product/service information are available at World WideWeb site http://www.cisco.com.Cisco is headquartered in San Jose, California.# # #
Telebit and NetBlazer are registered trademarks, and MICA, MicaBlazer andGranite are trademarks of Telebit Corporation. Cisco IOS and Cisco Systemsare a trademarks, and Cisco and the Cisco Systems logo are registeredtrademarks of Cisco Systems, Inc. All other trademarks, service marks,registered trademarks or registered service marks mentioned in thisdocument are the property of their respective owners.
Posted: Mon Jul 22 09:16:44 PDT 1996