RSYS buy IBM ARTIC
HILLSBORO, Ore.--(BUSINESS WIRE)--Feb. 10, 1999--RadiSys (Nasdaq:RSYS - news), a leading global supplier of embedded computing solutions for telecommunications, automation and other industries, today announced signing a definitive agreement with International Business Machines Corporation to acquire the assets of the IBM ARTIC development operation, located in Boca Raton, Florida, that develops communications coprocessor adapter hardware and software for wide area network (WAN) and other telephony applications.
The acquisition, subject to government approval, is expected to be completed in March. Under terms of the agreement, RadiSys will purchase the IBM ARTIC assets for about $22.8 million cash. The agreement includes the transfer of product and material inventory, backlog, and certain fixed assets. RadiSys will pay an additional $5 million to license a significant list of IBM patents. During 1998, sales of ARTIC products produced approximately $40 million in revenue. RadiSys expects this acquisition to be accretive.
Forty IBM ARTIC employees will be offered positions at RadiSys and 20 additional contract employees involved in ARTIC development will be invited to continue that work with RadiSys. The acquisition will become part of the RadiSys Telecommunications Division. Following closure and a transition period, RadiSys will establish a permanent facility in the Boca Raton area.
''This is a great growth opportunity for RadiSys because ARTIC is a perfect complement to our existing telecommunications building blocks and provides a broader range of solutions for our customers,'' commented Dr. Glen Myers, RadiSys CEO.
''First, ARTIC gives us a strong set of PCI-based WAN/telecom products supporting X.25, frame relay, T1/E1, SS7, and other types of interfaces and protocols. Second, the acquisition gives us a stronger base of underlying technology, such as some ASIC products; ATM, HDLC, and other protocols; and applications expertise. Third, because ARTIC products incorporate Intel processors, RadiSys clearly becomes the leading supplier of Intel processors for embedded applications.''
''This transaction is a win for everyone,'' commented Pat Toole, vice president, Solutions, IBM Industrial Sector. ''IBM and other customers will benefit because ARTIC and its leading-edge technology is ositioned for continued long-term growth and ARTIC employees are joining an exciting, dynamic and growing company that is fast becoming a preeminent supplier of embedded processors. It also allows IBM to focus more on its core solutions.''
''Currently, sales to internal IBM divisions are the majority of the business with the remaining business being primarily to a small set of external OEMs for telecommunications applications,'' added Myers. ''And, one of many nice points of synergy is that the new ARTIC Quad Digital Trunk PCI adapter used in IBM voice solution products uses the Texas Instruments 'C6x DSP chip further strengthening our 'C6x leadership. We look forward to the opportunity of continuing to supply IBM with ARTIC products, even trying to enlarge this relationship. We look forward equally to doing the same for the existing external OEMs, and to taking this product line and technology to our existing marketplace and customers.''
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