Looks likes they're starting to put some of that money to use today.
RadiSys to Acquire Microware
HILLSBORO, Ore., Jul 2, 2001 (BUSINESS WIRE) -- RadiSys Corporation (Nasdaq: RSYS chart, msgs)
and Microware Systems Corporation (Nasdaq: MWAR chart, msgs) today announced that they have
entered into a definitive agreement under which RadiSys, through a wholly owned subsidiary, will acquire
Microware for $0.68 per share in an all-cash tender offer valued at approximately $13.1 million.
Microware, based in Des Moines, Iowa, has been reshaping itself into a communications middleware
company from an earlier stage of being a general embedded software and real-time operating system
company. Microware is a leader in providing communications software, microcode, and professional
consulting services for Intel's highly successful IXP1200 network processor family. Microware's products
also include the OS-9 real-time operating system; connectivity and networking software including the
SoftStax integrated networking interface, SoftATM, Bluetooth, and router and managed switch protocols;
Personal JAVA for embedded devices; and digital video software packages for applications such as
extraction and decoding of video packets from an IP network.
"The acquisition of Microware provides RadiSys with a highly differentiated leadership position for
solutions using Intel's IXP network processor family," said Dr. Glen Myers, Chairman and CEO of
RadiSys. "Today Microware provides Ethernet and ATM packet processing microcode for the IXP's
microengines, along with routing middleware and IP stacks on the IXP StrongARM core. Being able to
combine this with RadiSys' hardware solutions using the IXP will allow us to offer customers complete
and faster-to-market solutions for applications like enterprise and edge routers, multi-service access
switches, and VPN devices."
RadiSys, Microware, and Intel recently showcased the companies' network-processor capabilities at the
SUPERCOMM 2001 show in Atlanta. Working demos included a booth-to-booth Voice over IP link using
IXP1200s between the Intel and RadiSys exhibits, and a WAN/LAN access switch using the IXP1200
powered by Microware's Microcode Solutions Library. Microware's software is also shipped with the new
IXDP1200 Advanced Development Platform available from Intel.
Historically, Microware's leading product has been OS-9, a real-time operating system used in a wide
variety of applications, such as cellular phones, pagers, set-top boxes, and vehicle navigation systems.
OS-9 has been optimized for the IXP1200's StrongARM core and is in use by a significant number of
current IXP1200 designs. Microware also provides its IXP1200 middleware and microcode on Linux and
VxWorks operating systems. Microware's revenues for its most recent fiscal year ending March 31, 2001
were $14 million. The company has been particularly successful in Japan, where it has 22 employees
and about a third of its revenues.
"This combination will be a tremendous benefit to our current customers," said Ken Kaplan, Microware
CEO. "The size and financial strength of RadiSys will reassure our current customers of our ability to
support them long-term, as well as deliver new capabilities to them. Being part of the RadiSys strategy
in network processors allows us to focus on next steps for our IXP1200 support in such areas as MPLS,
Packet over SONET, IPv6, ATM signaling, and advanced enterprise routing solutions."
The agreement provides for a cash tender offer to acquire all of the outstanding shares of Microware
common stock at $0.68 per share, which will commence within 10 working days. RadiSys will also pay
$2.2 million to retire Microware's convertible debt and related securities. The Board of Directors of
Microware has approved the definitive agreement and has unanimously recommended that Microware
shareholders tender their shares pursuant to the offer. RadiSys' obligations to accept shares tendered in
the offer will be conditional upon the tender of 90% of outstanding Microware shares on a fully-diluted
basis, other customary conditions, and compliance by Microware with certain financial and business
criteria. The tender offer will expire 20 business days after it is commenced, but may be extended under
certain circumstances. The chief executive officer of Microware has agreed to tender his shares in the
offer, as have other significant shareholders of Microware. It is expected that all shares not purchased in
the tender offer will be converted into the right to receive $0.68 per share in a second-step merger
following the tender offer.
The acquisition is expected to be completed in the third quarter of 2001 and is expected to be accretive
to earnings by year end. Upon completion, the organization will operate as a separate business division
of RadiSys. This division will continue to support current Microware customers and continue to sell
software and professional services to customers who don't choose to use RadiSys hardware solutions.
Microware Systems Corporation provides embedded software solutions that are used in advanced
communications infrastructure, Internet appliances, consumer electronics, wireless communications
devices, industrial automation, office automation, automotive control, and multimedia devices. Products
include software components such as the OS-9 real-time operating system and IXP1200 Microcode
Support Library and consulting services. Founded in 1977, Microware is headquartered in Des Moines,
Iowa, with sales offices in the United States, Europe, and Japan. Microware is a member of the Intel IXA
Developers Forum. For more information, visit www.microware.com.
RadiSys is a leading provider of building blocks enabling next-generation Internet and communications
systems. The building blocks provided to telecommunications equipment manufacturers include
Intel-architecture embedded computers, network processors, DSP modules and algorithms, network
interfaces and protocols, high-availability switch-fabric system platforms, and SS7/signaling blades and
gateways. RadiSys' highly differentiated position in the market is a result of its focus on Intel-based
technology, its broad array of building-block technology, its tight "virtual division" relationships with its
customers, and its use of intellectual property to generate "perfect fit" solutions for its customers.
RadiSys is a registered trademark. All other products are trademarks or registered trademarks of their
respective companies.
Except for the historical information contained herein, the matters discussed in this press release,
including the statements regarding expectations of future operating performance and future development
and business activities, are forward-looking statements that involve risks and uncertainties. The following
are among the factors that could cause actual results to differ materially: the ability to complete
successfully the proposed tender offer; the ability to integrate the operations of Microware successfully;
general business and economic conditions in the markets RadiSys serves, particularly the
communications market; changes in customer order patterns or inventory levels; dependence on the
relationship with Intel Corporation and its products; lower than expected or delayed sales by our
customers in the communications market; lower than expected design wins with key OEMs; failure of
leading OEMs to incorporate RadiSys' solutions in successful products; schedule delays or
cancellations in design wins; execution of the development or production ramp for design wins; deliveries
of products containing errors, defects and bugs; dependence on a limited number of suppliers or, in
some cases, one supplier for components and equipment used to manufacture products; competition in
the embedded computer market, which may lead to pricing pressures; political, economic and regulatory
risks associated with international operations; technological developments; the inability to protect
RadiSys' intellectual property or successfully to defend against infringement claims by others; availability
of qualified personnel; technological difficulties and resource constraints encountered in developing new
products; and difficulty or inability to meet obligations to repay indebtedness. The forward-looking
statements should be considered in light of these factors.
RadiSys urges you to read the tender offer statement when it is available because it will contain
important information about the transactions described in this press release. You will be able to obtain
the tender offer statement and other filed documents for no charge at the web site of the Securities and
Exchange Commission at www.sec.gov. You will also be able to obtain these documents when they
become available for no charge by contacting RadiSys' information agent, Mellon Investor Services LLC
at 800/504-8997 or 917/320-6267.
To obtain copies of the press release and other Company material please visit the web-site at
www.radisys.com or contact investor relations at investor.relations@radisys.com or call the RadiSys
Investor Line at 503/615-RSYS.
To receive these releases via email, visit our web page at www.radisys.com and subscribe to our
electronic mailing list.
Contact:
RadiSys Corp.
Stuart Cohen, 503/615-1433
stuart.cohen@radisys.com
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