Acquisition Expands Yurie's ATM Access Portfolio
LANDOVER, Md., Nov. 3 /PRNewswire/ -- Yurie Systems, Inc. (Nasdaq: YURI) announced today that it is purchasing privately-held Data Labs, Inc., the Gaithersburg, Maryland-based manufacturer of branch office ATM access equipment, in a deal involving 358,412 shares of Yurie stock. At today's closing price, the acquisition is valued at approximately $11.1 million.
The transaction is intended to be accounted for as a pooling of interests and will be slightly dilutive to earnings in the fourth quarter of this year and accretive thereafter. The purchase, which is expected to be completed this month, is subject to various customary conditions, including approval by both companies' boards of directors as well as Data Labs' shareholders. Yurie expects to recognize a one-time charge related to certain transaction costs and expenses in the fourth quarter when the deal is expected to close.
"The acquisition of Data Labs makes strategic sense for Yurie Systems," explains Jeong Kim, Yurie's chief executive officer and chairman of the board. "Without incurring the costs of development, we gain a mature product which strengthens our position for several significant near-term opportunities. We gain a solid team whose success working with Yurie in the past and whose proximity to our corporate headquarters promise a smooth integration. And we
can enhance the Data Labs products and extend an even broader ATM access portfolio to our key channel partners." Yurie Systems' current OEM partners include Lucent Technologies, Bay Networks, and AG Communications Systems.
Data Labs' Virtual Access (VA) product line aggregates voice, video, and data traffic onto a single wide area network link, facilitating ATM at T1/E1 rates and lower and offering cost-effective ATM access to branch and small regional offices. Yurie Systems currently resells the Data Labs VA 1000 as the LDR5.
Acquisition of the Gaithersburg firm gives Yurie Systems complete
development control of its low-end enterprise solutions, enabling the company to bring the firm's branch office access products more closely in line with Yurie's mid-range and high-end LDR offerings. Planned enhancements to the Data Labs products include the introduction of Yurie's voice compression and silence suppression capabilities. With their support for both North American and international interfaces, the Virtual Access products' also strengthen
Yurie's position in the burgeoning ATM equipment market overseas.
"This transaction affords two strong players in the ATM access equipment market the opportunity to join forces and deliver an impressive repertoire of solutions, extending from the customer premises to the central office," said Wenli Yu, Data Labs' chairman and chief executive officer.
Based in Landover, Maryland, Yurie Systems, Inc. designs, manufactures, markets, and services ATM WAN access equipment for telecommunications service providers and corporate and government end users. Yurie's LDR200 ATM access concentrator was released in September 1996 and won Data Communications' Hot
Product Award for WAN gear in January 1997. The Company completed its initial public offering in February, and in May Business Week magazine named Yurie Systems America's #1 Hot Growth Company. The Vertical Systems Group recently identified Yurie as the market share leader in the ATM WAN access market for 1997.
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