PCTL BUYS MULTILINK
ANDOVER, Mass., April 15 /PRNewswire/ -- PictureTel Corporation
(Nasdaq: PCTL), the global videoconferencing company, today announced that it
has signed a definitive agreement to acquire MultiLink, Inc., in a move that
will expand PictureTel's multimedia conferencing capabilities.
MultiLink, Inc., which is based in Andover, Mass., near PictureTel's world
headquarters, enjoys a leading market share for the supply of multipoint
audioconferencing systems.
The major reasons that PictureTel gave for making the acquisition are to
obtain technology that will enable it to accelerate its entry into the
intranet/Internet/LAN network space and to create the next generation
multimedia bridging products that mix audio, data and video with new levels of
reliability, ease-of-use and low cost. PictureTel expects to merge its IP
technology with MultiLink's technology to produce the next generation of
client/server products. In addition, PictureTel cited the importance of
acquiring and expanding the highly profitable audio bridging business in which
MultiLink now enjoys the leading market share. Because MultiLink's audio
market is mainly U.S.-based, PictureTel expects to increase this business by
aggressively marketing products through its industry-leading global
distribution channels.
"MultiLink has a strong record of delivering reliable products to the
market and they fit in well with PictureTel's strategy to be a leading
supplier of high-quality, integrated global videoconferencing systems targeted
for both the business-to-business and business- to-consumer markets," said
Bill Avery, vice president of PictureTel's Network Systems Division. "The
acquisition of MultiLink provides us with access to an extremely affordable
next-generation multimedia architecture that will fill out our product line
and enable new market development. This acquisition enhances PictureTel's
position as the leader in multimedia collaboration. We believe this move will
enable us to meet customers' ever-expanding demands for the most reliable,
easy to use conferencing systems and solutions.
"In addition, the expected proliferation of clients in the H.323
conferencing space will create significantly increased demand for the
networking capabilities that PictureTel will be able to provide," said Avery.
Under the terms of the agreement each share of MultiLink common stock will
be exchanged for 0.56 of a share of PictureTel common stock. Outstanding
options to purchase MultiLink stock will be converted at the exchange ratio
into PictureTel options. Based on the closing price of PictureTel stock on
April 15, 1997 the deal is valued at approximately $40 million. MultiLink
shareholders will own approximately 10 percent and PictureTel shareholders
will own approximately 90 percent of the combined company's shares.
The transaction is expected to be a tax free exchange and accounted for as
a pooling of interest. PictureTel believes the transaction will be dilutive
to its earnings in 1997 as a result of one-time expenses incurred related to
the transaction but expects that the transaction will enhance PictureTel's
profit and loss statement beginning in 1998. Completion of the transaction is
conditional upon approval by the shareholders of MultiLink and certain other
conditions as set forth in the definitive merger agreement. The transaction
is expected to close in PictureTel's second quarter ending June 28, 1997.
About MultiLink
MultiLink delivers its innovative mixed-media solutions to the commercial,
education, government and service provider markets. Applications include
business meetings, shareholder services, public relations, project management,
focus groups, teletraining, distance learning and crisis management. MultiLink
is an ISO-9001-compliant corporation.
About PictureTel
PictureTel Corporation is the world leader in developing, manufacturing
and marketing a full range of videoconferencing technologies. The company's
products serve videoconferencing needs from the desktop to the boardroom.
PictureTel also delivers network conferencing products and a comprehensive
portfolio of enterprise-wide services. Additional PictureTel information is
available on the Internet at www.picturetel.com. PictureTel videoconferencing
eliminates the barrier of distance, enabling people to be Anywhere Now(TM).
This release includes projections and other forward-looking statements
about the company's 1997 revenues, earnings, and other measures of economic
performance. Actual results could differ materially from forecasts due to
factors such as, for example, competitive pressures, changes in technology and
the difficulty of forecasting in overseas markets and indirect channels.
Additional information concerning risks that could cause actual results to
differ are contained in the company's annual report on Form 10K filed with the
SEC.
NOTE: PictureTel is a registered trademark and Anywhere Now is a trademark
of PictureTel Corporation.
Recent PictureTel news releases are available on our Web site at
www.picturetel.com or by calling 1-800-716-6000, extension 4 (U.S. and Canada
only)
MultiLink is a registered trademark of MultiLink, Inc. |
