| | Redback Networks to Acquire Abatis Systems, Accelerates Delivery of Value-added Services
SUNNYVALE, Calif., Jul 31, 2000 (BUSINESS WIRE) --
Abatis Systems' Carrier-Scale IP Service Framework Immediately
Extends Revenue Opportunities Across Entire New Access Network
Redback Networks, Inc., (Nasdaq: RBAK chart, msgs), a leading provider of advanced networking solutions, today announced that it has signed a definitive agreement to acquire Abatis Systems of Vancouver, Canada for Redback common stock valued at U.S. $636 million.
Abatis Systems has developed service creation and management tools that reduce the cost and complexity from the deployment of value-added IP services. The integration of Abatis Systems' service creation and management capabilities with Redback subscriber management and metro optical solutions will allow the company to rapidly accelerate service revenue opportunities for its carrier and service provider customers.
"The union of Abatis Systems' and Redback Networks' technology gives rise to a self service provisioning model for the New Access Network that has significant operational cost savings and revenue generating benefits," said Vivek Ragavan, president and chief executive officer of Redback Networks. "With the addition of Abatis Systems, we can offer our customers the ability to deliver high margin services to millions of subscribers, enforced with thousands of service-level agreements, via the most comprehensive and robust service creation and management solution available on the market."
With an installed base of over 2,700 Subscriber Management Systems(R) (SMS) and the recent introduction of the Smart Edge(TM) optical platform, Redback Networks has laid a strong foundation for the delivery of IP services. The addition of Abatis Systems' highly scalable, multi-vendor service infrastructure will enable Redback to increase the revenue generating IP service opportunities it provides to its customer base, which today comprises over 230 providers. The IP service revenue opportunities available through Redback Networks' expanded product set will span all major networking technologies within the New Access Network including DSL, cable, wireless, SONET, SDH, leased lines, frame relay and ATM.
"In this highly competitive market, retaining a customer base and increasing revenue are the key business objectives for service providers and carriers," said John Seminerio, president and chief executive officer of Abatis Systems. "Redback Networks has been extremely successful in developing and selling solutions that achieve these objectives for the broadband access and metro optical markets. Now, with the addition of Abatis Systems' powerful service creation and management capabilities, Redback Networks will increase the velocity at which the industry, and its customers, will be able to scalably and smoothly offer value-added IP services."
A Unified Framework to Deliver IP Services
The combination of Abatis Sytems' service creation and management solutions with Redback Networks' expertise in subscriber management and metro optical solutions sets the stage for a unified framework for provisioning and managing IP services across the breadth of the New Access Network.
"The combination of Redback and Abatis turns the service provisioning model on its head," said George Peabody, vice president and managing director, carrier and enterprise communications, at Aberdeen Group. "Instead of today's circuit-based jigsaw puzzle picture, service providers and their customers gain a true services-level network perspective that can be used to deploy new services quickly. The Redback and Abatis combination should let smart providers gain market share and increase margins through application-specific services like VPNs, videoconferencing and guaranteed access to applications."
The barriers to deploying high-bandwidth IP services, such as virtual private networks, application hosting and streaming content, are essentially removed in this unique solution that integrates Abatis Systems' service portal and "network aware" management platform with Redback Networks' subscriber management and metro optical systems.
Abatis Systems' service portal makes it simple for business or consumer subscribers to select and pay for IP services from a carrier, Internet service provider (ISP) or application service provider (ASP) through an intuitive graphical interface. The service portal utilizes standards-based XML and is layered on top of a unique "network aware" service manager that has the ability to understand the topology and performance of the transport network responsible for delivering the service. This offloads network capacity scheduling for a service such as video conferencing from the end-user to the service manager. The manager can scale to thousands of service profiles and millions of records through the use of open platform Oracle 8i database technology.
Working in conjunction with this powerful service-enabling software framework is the network infrastructure consisting of Redback Networks' Subscriber Management System and SmartEdge products along with Abatis Systems' line of IP edge devices, which can be used at the customer premise to deliver and enforce IP services, such as virtual private networks and voice over IP.
"With the addition of Abatis Systems' creation and management software infrastructure, as well as its intelligent edge devices, Redback will be in a unique position in the industry," said Gaurav Garg, Redback founder and vice president of business development and strategy. "We will enable carriers and service providers to gain revenue more rapidly through the mass-market delivery of IP services across the New Access Network."
The unified framework resulting from the Redback Networks/Abatis Systems service infrastructure provides the following benefits for customers:
-- Provides open infrastructure for enabling thousands of
self-provisioned IP services
-- Enables carriers and providers to plug in any mix of "home
grown" and 3rd party services, applications and content
-- Simplifies purchasing of services through intuitive graphical
service portal, resulting in higher subscription rates and
greater revenue
-- Masks the complexity of service creation and deployment
through seamless integration of software framework and
hardware infrastructure, resulting in true "network awareness"
Transaction Terms
Under the terms of the agreement, which was approved by each company's board of directors, Redback Networks, or a new Redback Canadian subsidiary, will issue about 5.2 million Redback shares for all outstanding shares, options and warrants of Abatis Systems. Based on the closing price of Redback Networks shares on July 28, 2000, the transaction is valued at U.S. $636 million. The shares of the new Redback Canadian subsidiary will be issued to Canadian residents who elect to receive such shares and will be exchangeable, on a share-for-share basis, for Redback common stock.
Upon completion of the merger, Abatis Systems will become a Redback Networks subsidiary. John Seminerio will become general manager of the Abatis Systems subsidiary in Vancouver, Canada, and will report to Vivek Ragavan. All Abatis Systems personnel are expected to continue with the Company.
The transaction is expected to close early in Fall 2000, and is subject to normal regulatory approvals in Canada and the United States, as well as court approval in Canada.
About Redback Networks, Inc.
Founded in 1996 and headquartered in Sunnyvale, Calif., Redback Networks, Inc., is a leading provider of advanced networking solutions that enable carriers, cable operators, and service providers to rapidly deploy broadband access and services. The company's market-leading Subscriber Management Systems(TM) (SMSs) connect and manage large numbers of subscribers using any of the major broadband access technologies such as Digital Subscriber Line (DSL), cable, and wireless. To deliver integrated transport solutions for metropolitan optical networks, Redback's SmartEdge(TM) multi-service platforms leverage powerful advances in application-specific integrated circuit (ASIC), IP, and optical technology. With this product portfolio, Redback Networks is the first equipment supplier focused exclusively on developing integrated solutions for the New Access Network.
Redback is a U.S. Registered Trademark and the Subscriber Management System is a Trademark of Redback Networks, Inc. Other trademarks, service marks, and trade names belong to their respective owners.
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 future development of Redback and Abatis products, interoperability of these products, demand for these products and future sales of these products to customers, advantages to customers, and new corporate structures. 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.
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