Yes, but somehow nobody seems to want to buy it !! Also according to the following we know exactly what to expect; so it is not going to go anywhere...
Joe
Networking-Gear Maker Fore Sees Earnings Diluted By Acquisition
Dow Jones Online News, Friday, August 28, 1998 at 17:23
By Ross Kerber, Staff Reporter
PITTSBURGH -(Dow Jones)- Fore Systems Inc., a
telecommunications-networking gear maker, Friday said it expects to earn
roughly 59 cents a share for the fiscal year ending March 31, 1999.
Fore Systems (FORE) earlier this week agreed to acquire closely held
Berkeley Networks in a stock deal valued at about $250 million. Thomas
Gill, Fore's president and chief executive, told Dow Jones that the
acquisition will dilute its earnings by four cents to six cents a share
for the fiscal year, before restructuring charges.
Prior to the agreement, Fore said, the mean estimate of 16 analysts
surveyed by First Call was that Fore would earn 64 cents for the current
fiscal year.
For the year ended March 31, 1998, Fore reported net income of $35.2
million, or 35 cents a share, on revenue of $458.4 million.
Fore agreed to buy Berkeley Networks for 8.475 million newly-issued
shares. Under the terms of the agreement, Fore said it would also grant
options to acquire about 607,000 shares to Berkeley Networks options
holders. In addition, Fore will pay equity holders of Berkeley Networks
up to an additional $30 million if certain goals are met.
Fore said it will take a restructuring charge of $1.80 to $2.20 a
share during the current fiscal quarter, ending Sept. 30, to cover a
write-off of in-process research and development. Fore also will
establish a reserve of about five cents a share to cover other costs.
Bruce Haney, Fore's chief financial officer, said the new business
should add from three cents to six cents a share to earnings for the
fiscal year ending in March 2000. By the end of the current fiscal year,
he said, Fore hopes the effect of the transaction on ongoing earnings
will be "right around break-even," he said.
The deal gives Fore the ability to sell Berkeley's advanced
computer-networking devices that work closely with Microsoft Corp.'s
operating-system software. But after Fore announced the deal after the
close of trading Tuesday, its shares fell from $24.25 to as low as
$16.625 over the next two days. In addition to a general decline among
technology stocks, the shares may have fallen because analysts viewed
Fore as a less-likely takeover candidate following the acquisition news,
Gill said.
Fore's shares have since recovered somewhat, and closed Friday at
$19.813.
Jeremy Duke, director of the networking group at Cahner In-Stat Group
in Newton, Mass., said the agreement is likely to make Fore more
competitive against bigger networking-equipment rivals such as Cisco
Systems Inc., which already offers high-speed connectivity devices meant
for smaller corporate users. "Normally I'm skeptical of these deals,
because you have integration issues," Duke said. "But what Fore has done
enhances their product offerings for high-speed infrastructure sales."
Ross Kerber: 201-938-5099
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