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Redback/Siara Systems Press Release...
SUNNYVALE, Calif.--(BUSINESS WIRE)--Nov. 29, 1999-- Addition of
Siara's Next-Generation IP, ASIC and Optical Technology, Product
Portfolio, and Veteran Team, are Key to Delivering the New Access
Network
Redback Networks, Inc., (Nasdaq:RBAK) today announced that it has
signed a definitive agreement to merge with Siara Systems of
Mountain View, Calif. Based on Friday's closing price, the
transaction is valued at $4.3 billion, creating an entity with a
total market value of $11.2 billion. With the addition of Siara's
product portfolio and network operations software, Redback plans
to extend its service creation and management capabilities across
the entire New Access Network, which is expected to be in excess
of $15 billion by 2000 and grow rapidly thereafter -- an
opportunity substantially larger than Redback's current market. In
addition, the company will acquire a roster of seasoned executives
and over 170 engineers, both of which will be key to maintaining
leadership in this larger market.
"We expect the combination of Siara Systems and Redback to create
a powerful supplier in the communications industry, focused on
serving the next generation access and service creation
requirements of carriers and service providers," said Dennis
Barsema, CEO and president of Redback Networks. "From the edge of
today's core optical backbone networks to global corporate
networks to individual broadband subscribers, Redback Networks
expects to work closely with its customers as they build the New
Access Network."
Focused on Building the New Access Network
Redback is already the leading supplier of subscriber and service
management solutions for the broadband market, and with the Siara
merger, is poised to become what both companies believe is the
first equipment supplier focused on developing integrated
solutions for the New Access Network. This network, which is
fueled in part by the massive growth of installed fiber in the
metropolitan area, is expected to span all layers of transport and
services from the edge of the optical core to global corporate
networks to individual broadband subscribers.
Key Benefits of New Access Network Equipment to Providers:
*T
-- Replaces multiple point of presence (POP) and central office
(CO)-based devices with integrated devices, dramatically reducing
complexity of operation, and power and space requirements
-- Leverages software-based provisioning to significantly decrease
the time frame required to provision or expand services
-- Eliminates truck rolls and reduces operations cost by making
the
entire POP or CO remotely manageable
-- Dramatically increases available processing power, enabling the
creation of incremental value-added services for major revenue
opportunities
*T
With the addition of Siara's expertise in optical, silicon and IP
technologies -- key building blocks for New Access equipment --
and full suite of products, Redback Networks expects to be in a
unique position to accelerate service providers' and carriers'
plans for leveraging the New Access Network.
"In this very competitive market, retaining a customer base and
increasing revenue are the key business issues service providers
and carriers are facing," said Vivek Ragavan, CEO and president of
Siara. "Redback Networks has been extremely successful in
developing and selling solutions that achieve those objectives for
the broadband access market. Now, with the addition of Siara's
core technologies and products, Redback Networks expects to
deliver next-generation of networking solutions our customers
could leverage to define the transport and value-added services of
the future."
"Qwest is a leading edge broadband network provider, and needs
vendors that are highly responsive and intimately understand our
technical and market requirements," said Afshin Mohebbi, Qwest
chief operating officer and president. "With the prospect of a
powerful Redback-Siara combination, we would have a single
supplier we could work with to obtain next generation platforms
for combining all types of access, from the core all the way to
the subscriber, with creation and delivery of next generation
broadband IP services. The ability to blend optical transport with
the creation and delivery of services would enable Qwest to reduce
the number of components in its network, while extracting
significantly more revenue from the resulting services."
Siara's Optical, ASIC and IP Technology Complements Redback's
Market Leading Subscriber and Service Management
Siara's portfolio of next generation products and network
operations software -- optimized for both access and metropolitan
networks -- is designed to enable progressive service providers
and carriers to deliver both traditional time division
multiplexing (TDM) and IP-based services with carrier grade
reliability, security, and scalability. In developing its
solutions, Siara has invested in creating world-class competency
in application specific integrated circuit (ASIC) and
microprocessor design, optical and SONET transport, and carrier
class IP software development.
Among Siara's portfolio of technologies are six critical ASICs,
some with up to five million gates and near 80 billion
instructions per second of combined processing performance. These
ASICs cover such areas as IP routing, value-added IP services and
next generation SONET functionality. Siara's ASIC design team,
headed by Michael Yamamura, was responsible for creating Advanced
Micro Devices' recent K6 and K7 microprocessors. In addition,
Siara has developed core expertise in carrier-grade IP software,
and has built one of the leading IP development teams in the
industry with experience implementing large-scale IP routing in
public networks. Managed by Ravi Chandra, a former lead IOS
software manager at Cisco Systems, Siara's IP development team
members have already successfully implemented the major IP-based
routing protocols used in the Internet today.
Redback Networks is the industry leader in broadband subscriber
management and service creation. Over 120 leading service
providers and carriers worldwide have deployed more than 1,100 of
the company's Subscriber Management Systems(TM) to manage large
volumes of broadband access subscribers, as well as to create
revenue-generating IP services. Redback continues to deliver
innovations in subscriber auto-provisioning, the ability to off-
load dial modems from the voice network, and the distribution via
broadband of media-rich content and services.
Transaction Terms
Under the terms of the agreement, which was approved by each
company's board of directors, Redback will issue 31.3 million
shares for all outstanding shares, options and warrants of Siara
Systems. Based on Friday's closing price of $136.50, the
transaction is valued at $4.3 billion, and will create a new
entity with a total value of $11.2 billion. Redback stockholders
will own 62% of the new entity, and Siara stockholders will own
38%.
The merged company will retain the name of Redback Networks, and
global headquarters will remain in Northern California. The
company will retain Siara's Vancouver, B.C.-based software
development facility as a second development center. Dennis
Barsema will remain chief executive officer of Redback, while
Vivek Ragavan will become president and chief operating officer.
Craig Gentner will continue as Redback 's chief financial officer.
The Siara product development team, which is comprised of nearly
170 engineers, will retain its current structure. Key members of
Siara's executive and technical team include:
*T
-- Vivek Ragavan -- former group president ADC Telecommunications
-- Bill Kind -- former president of Lucent's $2B Access Products
Division
-- Pankaj Patel -- former senior director of engineering at Cisco
Systems
-- Ravi Chandra -- former Cisco IOS development manager
-- David Stiles -- former architect of Advanced Micro Devices
K6/K7
microprocessors
-- Greg Favor -- former architect of Advanced Micro Devices K6/K7
microprocessors
-- Don Chan -- former vice president of engineering at Arris
Interactive and Nortel
*T
All other Redback and Siara personnel are expected to continue
with Redback. Upon completion of the merger, Siara board members
Vinod Khosla, a general partner at Kleiner Perkins Caufield and
Byers, and Vivek Ragavan will join Redback's board of directors.
One additional board member will also be named.
The merger is subject to various closing conditions, including
approval by the stockholders of each company and approval under
the Hart-Scott-Rodino Antitrust Improvements Act.
About Siara Systems
Siara Systems develops multi-service platforms for next-generation
access networks, core to edge. The company leverages advances in
silicon, optics and IP software to uplift access network
performance. Siara's flagship technologies included patented
processing hardware, routing and signaling software to achieve
network scalability, real-time service customization and rapid
service delivery. The multi-service platform is built from the
ground up to efficiently migrate SONET networks to new intelligent
IP and optical network. At the same time, Siara's platform
delivers multi-layer integration, COS awareness and robustness to
already IP-centric networks. Siara was conceived as the access
market component of Kleiner Perkins' telecommunications portfolio,
which included Cerent, Juniper and Corvis Networks. For more
information, contact Siara Systems, Inc., 300 Ferguson Drive,
Mountain View, CA 94043, 650/390-9030 or access www.siara.com.
About Redback Networks, Inc.
Founded in 1996 and headquartered in Sunnyvale, Redback Networks,
Inc., is a leading provider of advanced networking solutions that
enable carriers, cable multiple system operators (MSOs), and
service providers to rapidly deploy high-speed broadband access to
the Internet and corporate networks. The company's Subscriber
Management System (SMS) connects and manages large numbers of
subscribers using any of the major high-speed access technologies
such as Digital Subscriber Line (DSL), cable, and wireless. The
SMS received Best of Show honors for WAN and remote access
equipment at NetWorld+Interop, Las Vegas, in May 1998, and was
honored by Telecommunications Magazine as one of the "Lucky 13"
hot products in telecom at the SUPERCOMM '99 show in Atlanta.
Safe Harbor Statement under the Private Securities Litigation
Reform Act of 1995
The statements contained in this press release that are not purely
historical are forward-looking statements within the meaning of
Section 21E of the Securities and Exchange Act of 1934, as
amended, including statements regarding Redback Networks'
expectations, beliefs, intentions or strategies regarding the
future. Forward-looking statements include statements regarding
the completion of the proposed merger with Siara Systems, the
benefits to be derived from the merger of the two companies and
the integration of their technologies and product offerings,
future sales to customers, and the migration of service providers
and carriers from traditional access offerings to next-generation
IP-based services. All forward-looking statements included in this
document are based upon information available to Redback Networks
as of the date hereof, and Redback Networks assumes no obligation
to update any such forward-looking statements. Forward-looking
statements involve risks and uncertainties, which could cause
actual results to differ materially from those projected. These
and other risks relating to Redback Networks' business are set
forth in the documents filed by Redback Networks with the
Securities and Exchange Commission, specifically the most recent
report on Form 10-Q, and the other reports filed from time to time
with the Securities and Exchange Commission.
Note to Editors: Redback and the Subscriber Management System are
trademarks of Redback Networks, Inc. Other trademarks, service
marks, and trade names belong to their respective owners. |
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