Comverse and Boston Technology MERGE
I do not see the need for either company to merge.
Is this an attempt to increase their size to compete better with Lucent (Octel)??
I think both companies are large enough on their own and were better off without a merger.
AUG 21,1997 0:40 PACIFIC 03:40 EASTERN
( BW)(COMVERSE-TECHNOLOGY)(CMVT) Comverse Technology, Inc. And
Boston Technology, Inc. Sign Definitive Merger Agreement
Business Editors
WOODBURY, N.Y., and WAKEFIELD, Mass.--(BUSINESS WIRE)--August
21, 1997--Comverse Technology, Inc. (NASDAQ: CMVT) and Boston
Technology, Inc. (NYSE: BSN) announced today the signing of a
definitive agreement for the merger of Boston Technology with
Comverse Technology in a tax-free, stock-for-stock transaction, which
will be accounted for as a pooling of interests.
Under the terms of the agreement, each share of Boston Technology
common stock will be converted into 0.65 of a share of Comverse
Technology common stock. Based on Boston Technology's current number
of outstanding shares, Comverse will issue approximately 17.7 million
new shares to Boston Technology shareholders to complete the
transaction. Boston Technology shareholders will own approximately
41 percent of the resulting common stock of Comverse, while Comverse
Technology shareholders will own approximately 59 percent. The
transaction is expected to be modestly accretive to earnings per
share in the first year after the completion of the transaction,
excluding one-time merger and integration-related charges.
A one-time charge, covering primarily merger and
integration-related costs, is expected to be recorded in the quarter
in which the transaction is completed. The companies expect to
achieve cost savings over the first year from the consolidation of
select overseas offices and through other economic synergies.
However, this transaction is a merger of two rapidly growing
organizations, and the resulting company is expected to continue to
expand its workforce and operations after the merger.
The combined company will be called Comverse Technology, Inc.,
and will continue to be listed on the NASDAQ exchange. The company
headquarters will remain in Woodbury, NY. The operations of Boston
Technology will be combined with Comverse's Network Systems Division,
the largest operating unit of Comverse Technology. Comverse Network
Systems Division will be headquartered in Wakefield, MA.
Kobi Alexander, Comverse Technology's Chairman, President and
Chief Executive Officer, will continue in his present role. Francis
E. Girard, currently President and Chief Executive Officer of Boston
Technology, will become President and Chief Executive Officer of
Comverse Network Systems Division. The Board of Directors of
Comverse Technology will be expanded to nine members, and will
include Gregory C. Carr, who is currently Boston Technology's
Chairman, and Mr. Girard.
Kobi Alexander, Chairman, President and Chief Executive Officer
of Comverse Technology, said, "The strategic benefits of this merger
are compelling for a number of reasons. This is a merger of two
strong, successful, rapidly growing companies. This merger will
position us as a leading supplier of enhanced services platforms to
telecommunications network operators, both in the United States and
internationally. Over the past four quarters, Comverse and Boston
have achieved sales growth of 44 percent and 60 percent,
respectively, and net income growth, excluding non-recurring gains,
of 71 percent and 136 percent, respectively. Together, we will have
a powerful combination of technology, research and development
capabilities, customer service and support, sales and marketing, and
a blue chip customer base that includes seven of the ten largest
telecommunications network operators in the world."
"Our companies are complementary in a number of ways," continued
Alexander. "Boston Technology is a leader in several important
regions, including the United States, Japan, and Brazil, while
Comverse is a leader in Europe and other important regions. Boston
Technology is a leader among wireline network operators, and Comverse
is a leader among digital wireless network operators. Boston
Technology has concentrated on very large customers, particularly in
the United States and Japan, and Comverse has a more diverse customer
base throughout the world. Together, we have more than 200
telecommunications network operator customers, including twelve of
the world's twenty largest telephone companies, with very little
customer overlap. As these telephone companies continue to launch
and expand revenue-generating services such as voice mail, unified
messaging, information services, voice recognition-based services,
text messaging, and other personal assistant and personal
communications services, we are well-positioned to participate in
this growth."
"The addition of Boston Technology's excellent management and
employees to our team," concluded Alexander, "brings to us a wide
range of strengths, including top-notch account management,
first-class training, service and support, and solid technical
resources. They will add significant value to our organization, and
will allow us, our shareholders and our customers to enjoy the full
opportunity presented in this rapidly growing market."
Francis E. Girard, President and Chief Executive Officer of
Boston Technology, said, "We are excited about this opportunity to,
in one step, expand our customer base, and increase and leverage our
technological and managerial strengths and resources to take full
advantage of the continued growth we see in the enhanced services
arena. This combination will bring together two teams of highly
experienced, dedicated employees, with similar corporate cultures,
values and goals. This team will be able to provide our customers
with an unmatched level of engineering resources, along with a wider
range of products and services to serve their rapidly expanding needs
for world-class enhanced services."
"Comverse's excellent and experienced management team,
considerable financial resources, and strong engineering staff, which
includes the enhanced services platform industry's largest team of
Advanced Intelligent Network specialists, will enable our combined
company to compete and serve our customers on a higher level,"
continued Girard. "Together, we will be able to offer our customers
the best of both companies' products, resources, technology, research
and development, and service and support. This merger is a perfect
fit. In addition to the complementary nature of our respective
industry leadership positions, and our complementary areas of
technological expertise, these two organizations are focused on a
similar set of core issues. We are committed to increasing
shareholder value, customer satisfaction, and providing an
environment where talented employees are given the opportunity to
reach their full potential and are rewarded accordingly, and where
fostering innovation, and continuous improvement and total quality
are established values."
Gregory C. Carr, Chairman and largest individual shareholder of
Boston Technology, said, "I am excited and highly optimistic about
the strategic benefits of this merger. In addition to the
complementary nature of our leadership positions and technological
expertise, Boston Technology shareholders will benefit from a vastly
expanded customer base. We have long respected Comverse's strong,
consistent record of growth, financial performance and creation of
shareholder value, and I am confident that the combined company will
continue to prosper."
The combined company is committed to preserving the investment of
all of its customers, and will continue to market, support and
enhance both companies' platforms. Both platforms will evolve over
time, to take advantage of the expanded technology and resource
strengths of the two companies.
The merger is conditioned upon the approval of each company's
shareholders and customary regulatory clearances, and is expected to
be completed by the end of 1997.
Comverse Technology, Inc., headquartered in Woodbury, New York,
designs, develops, manufactures and markets computer and
telecommunications systems for a variety of communications processing
applications, including multimedia messaging, personal communications
and information processing systems marketed to telecommunications
network operators under the name TRILOGUE, multiple channel,
multimedia digital monitoring systems marketed under the name
AUDIODISK, and multiple channel, multimedia digital recording systems
marketed under the name ULTRA(. For the year ended December 31,
1996, Comverse achieved sales growth of 44 percent, and net income
growth, excluding non-recurring gains, of 61 percent. For the six
months ended June 30, 1997, Comverse's sales increased by 50 percent,
and its net income, excluding non-recurring gains, grew by 72
percent. Comverse ended the June, 1997 quarter with record cash and
cash equivalents, bank time deposits and short-term investments of
$253,885,000, and record working capital of $310,327,000.
Boston Technology, Inc., headquartered in Wakefield,
Massachusetts, supplies innovative systems, software and services to
telephone, long distance, cellular, PCS (Personal Communications
Service), cable, and other companies in the telecommunications
industry that enable them to provide voice mail, integrated internet
messaging, and other services to their customers. Boston Technology
is a worldwide market leader serving half of the world's 20 largest
telephone companies in 13 countries. For the year ended January 31,
1997, Boston Technology achieved sales growth of 83 percent, and net
income growth, excluding non-recurring items, of 188 percent. For
the six months ended July 31, 1997, Boston Technology's sales
increased by 68 percent, and its net income, excluding non-recurring
items, grew by 170 percent. The company is the winner of a 1996
President's "E" Award for Excellence in Exporting.
Internet users: For additional information, you may visit the
companies' web sites at: comverse.com
bostontechnology.com
Information contained in this release with respect to the expected
financial impact of the proposed merger is forward-looking. These
statements represent the companies' reasonable judgment with respect
to future events and are subject to risks and uncertainties that
could cause actual results to differ materially. Such factors
include, but are not limited to, material adverse changes in economic
and competitive conditions in the markets served by the companies,
material adverse changes in the business and financial condition of
either or both companies and their respective customers,
uncertainties concerning technological changes and future product
performance, and substantial delay in the expected closing of the
merger.
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MEDIA ALERT
MEDIA TELECONFERENCE
to discuss the merger of Comverse Technology, Inc.
and Boston Technology, Inc.
with
Kobi Alexander President, Chairman and Chief Executive Officer of
Comverse Technology, Inc.
and
Francis E. Girard
President and Chief Executive Officer of
Boston Technology, Inc.
Thursday, August 21, 1997
11:30 a.m. (EDT)
To participate in the teleconference please call: (800) 679-8553 and
ask to be connected to the Comverse/Boston Technology teleconference.
Due to the expected volume, please call at least 15 minutes before
the conference is to begin.
International callers please call (706) 645-9721
Contact:
Patricia Sturms
Abernathy MacGregor Group
212 / 371-5999
Abernathy MacGregor Fax on Demand Service at 800 / 281-3244 is
available to send the following documents:
Press Release No. 295
Companies Fact Sheets No. 296
Bios No. 297
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--30--eb/ny*
CONTACT: Kobi Alexander/Paul D. Baker
Comverse Technology, Inc.
170 Crossways Park Drive
Woodbury, NY 11797
(516) 677-7200
or
Francis E. Girard/Patricia Muzzy
Boston Technology, Inc.
100 Quannapowitt Parkway
Wakefield, MA 01880
(617) 246-9000
KEYWORD: NEW YORK
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS TELECOMMUNICATIONS
COMED INTERACTIVE/MULTIMEDIA/INTERNET MERGERS/ACQ
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