CrossKeys Systems rises 5% on news of Dynamic purchase
$10-million telcom acquisition first
for Newbridge affiliate since going public
SIMON TUCK
Technology Reporter
Wednesday, December 22, 1999
Ottawa -- CrossKeys Systems Corp. shares climbed 5.5 per cent yesterday on news it is buying Dynamic Broadband Networks Inc. of Allentown, Pa., its first purchase since going public more than two years ago.
CrossKeys shares gained 55 cents to $10.55 on the Toronto Stock Exchange.
Kanata, Ont.-based CrossKeys, the best known of Newbridge Networks Corp.'s affiliates, said it will pay $10-million (U.S.) for the U.S. telecommunications company, plus warrants to purchase up to two million CrossKeys common shares. The warrants, which have an exercise price of between $6.75 and $9, will be issued subject to performance targets and the retention of senior employees.
It may be just the first in a string of deals. CrossKeys, which for the past couple of years has been a reluctant buyer, has said more recently that it hopes to add acquisitions to its existing growth strategies.
The deal, which is expected to close in early January, indicates CrossKeys' desire to play "a more activist role on the Internet," said Ian McLaren, the company's president and chief executive officer. "It's a very natural extension of our business."
It also indicates a more aggressive approach to growth. While looking for attractive acquisitions, CrossKeys has also been trying to forge new partnerships while reducing its dependence on Newbridge.
The acquisition is designed to improve the capabilities of CrossKeys' existing software, which helps telecommunications network firms manage their operations.
Dynamic Broadband develops broadband access management technology and software that manages telecommunications services. |
