Stac Approves Distribution of Hi/fn Shares; Stac to be Restructured as Separate Software and Semiconductor Companies
August 5, 1998 04:10 PM
SAN DIEGO, Aug. 5 /PRNewswire/ -- Stac, Inc. STAC today announced that its Board of Directors has approved in principle a plan to spin-off Stac's semiconductor business by distributing all of Stac's equity interest in Hi/fn, Inc. pro rata to Stac stockholders. Hi/fn owns the semiconductor business previously operated as a division of Stac, including the related assets, liabilities and intellectual property. The spin-off is expected to be completed in November 1998, subject to certain considerations. "We believe that separating Stac and Hi/fn into enterprise software and semiconductor 'pure-plays,' respectively, will allow investors to analyze and invest in each company according to their investment specialties, provide incentive and focus for each company's management, and enhance the ability of Stac and Hi/fn to raise equity capital efficiently," said Gary Clow, Stac's chairman and chief executive officer. "Stac has focused on the development and marketing of storage management software for enterprise Windows networks, while Hi/fn has combined its patented data compression technology with data encryption standards in high-performance, multi-protocol packet processors for networking applications."
Holders of Stac Common Stock will receive approximately one share of Hi/fn Common Stock for every four shares of Stac Common Stock held as of a record date to be specified. The actual distribution ratio will be based on the number of Stac shares outstanding and the Hi/fn shares to be distributed by Stac at the time of the distribution -- Stac currently has approximately 24 million shares of common stock outstanding and owns approximately 6 million shares of Hi/fn common stock on a converted basis. Holders of Stac stock options will not participate in the distribution unless they exercise prior to the record date. Outstanding Stac stock options will be adjusted in an appropriate manner to reflect the Hi/fn stock dividend. The distribution is expected to be a non-taxable dividend under Section 355 of the Internal Revenue Code. Prior to the distribution, Hi/fn will apply for quotation and trading on The Nasdaq Stock Market's National Market System under the symbol "HIFN."
The declaration of the dividend to Stac stockholders remains subject to approval by Stac's Board of Directors. Until the distribution has been completed, the terms of the distribution may be modified or the transaction may be abandoned at any time. Among the considerations for approval of the distribution by Stac's Board of Directors is the receipt of either a private letter ruling from the Internal Revenue service or an opinion from PricewaterhouseCoopers that the facts and circumstances underlying the distribution qualify the dividend for tax-free treatment under Section 355 of the Internal Revenue Code. The distribution also is subject to the effectiveness of an information statement to be filed with the Securities and Exchange Commission regarding the distribution and Hi/fn. The Board of Directors has approved the filing of the information statement, which is expected to be filed within ten days. No stockholder vote is required in connection with the distribution.
About Stac, Inc.
Founded in 1983, Stac STAC is known worldwide for its innovations in data compression. The Company builds on these advancements to create high-performance, systems recovery software solutions to protect business-critical data in networked enterprises. Information on Stac's award- winning products can be accessed via the Internet at stac.com and hifn.com, by calling the company's North American Headquarters in San Diego, California: 1-800-279-7822 ( U.S. and Canada), Stac's European Headquarters in the United Kingdom: +44 (0) 1344-302900 (Europe), or +1 (619) 794-3741 in other countries.
About Hi/fn, Inc.
Hi/fn, Inc. of San Jose, California makes integrated circuits and software for manufacturers of computer networking products. Hi/fn's integrated compression-encryption technology is central to the growth of the Internet, helping to make electronic mail, web browsing and Internet shopping faster and more efficient. Nearly all network router manufacturers use Hi/fn's patented technology to improve data packet processing. Hi/fn's Web site is www.hifn.com.
* Except for the historical information contained herein, this news release contains forward-looking statements that involve risks and uncertainties. The Company makes no assurances regarding the future success of its products. Those risks include, but are not limited to, delays in the development or introduction of products, customer or sales channel acceptance of products, competitive product introductions from new or established competitors, variances in customers' semiconductor component demand, and pricing pressures in the software and semiconductor industries.
The Company does not project future financial results and expressly disclaims any responsibility for any such projections released by third-party analysts. The above risk factors are more fully discussed in the Company's Form 10-K for the year ended September 30, 1997 and its quarterly reports on Form 10-Q.
Stac and Hi/fn are registered trademarks of Stac, Inc. and Hi/fn, Inc., respectively. All other trademarks are the property of their respective owners.
SOURCE Stac, Inc
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