Newbridge Networks and Stanford management will be hosting a conference
call on Tuesday, June 22nd at 5:30 p.m. Eastern Daylight Time.
Telephone Conference Call
Please call in 10 minutes prior to the start of the call
North America: 1-800-553-3709
International: 1-303-267-1007
Audio Web Cast (listen only mode)
Newbridge web site: www.newbridge.com
CONTACTS:
Financial Analysts: John Lawlor (613) 591-3600
jlawlor@newbridge.com
Media and analysts: Gary S. Wolf (408) 745-2403
Gary.Wolf@stelhq.com
Media: Christopher Fox (613) 591-3600
cfox@newbridge.com
FitzGerald Communications: Keith Figlioli (415) 677-0210
kfiglioli@fitzcomm.com
Newbridge Networks to Acquire Stanford Telecommunications
Further Strengthens Industry Leadership in Broadband Wireless Market
KANATA, Ontario and SUNNYVALE, California, June, 22, 1999 - Newbridge
Networks (NYSE: NN; TSE: NNC) today announced it has signed a definitive
agreement to acquire Stanford Telecommunications, Inc. (STII: Nasdaq), a
leading supplier of key broadband wireless technology and products.
The boards of directors of Newbridge Networks and Stanford
Telecommunications have approved an agreement and plan of merger,
subject to conditions including approval by Stanford Telecom€s
stockholders, whereby Newbridge will acquire all of the outstanding
shares of common stock of Stanford Telecom in a tax-free,
stock-for-stock exchange.
After proceeds from the divestiture of unrelated businesses, the
Stanford Telecom acquisition is expected to have a net cost to Newbridge
of approximately US$280 million. The parties expect to close the
transaction by November of this year. In addition to being subject to
the approval of Stanford Telecom's stockholders, the transaction is
conditional on the execution of a definitive agreement for the sale of
the other operations, receipt of regulatory approvals and other
customary closing conditions. The transaction will be accounted for
under the purchase method of accounting.
Under the agreement Stanford Telecom stockholders will receive for each
share of common stock US$30 in Newbridge stock plus a contingent value
right (CVR) which will give them a participation in the proceeds on the
sale of other operations above a minimum amount. This participation will
also be payable in the form of Newbridge common shares. The CVR may have
a value of up to US$5 per share.
For the purpose of this transaction, the value of a Newbridge common
share shall equal the ten-day average closing price on the NYSE, ending
on the fifth trading day immediately preceding Stanford Telecom's
stockholder vote, expected in October. If the Newbridge stock price,
pursuant to this calculation, is below US$24 and Newbridge does not
exercise its right to adjust the exchange ratio, Stanford Telecom's
board will be permitted to terminate the Agreement.
Upon closing, Newbridge intends to retain the Wireless Broadband
Products group, which currently forms part of Stanford Telecom's
wholly-owned subsidiary Stanford Telecom Wireless Broadband, Inc., and
other associated groups, which are presently held in Stanford Telecom's
Base Business Operations. Stanford Telecom and Newbridge have agreed
that Stanford Telecom€s other operations, including SATCOM Ground
Systems, Communications Systems Integration, Applied Technology
Operation, Advanced Communications Systems and Manufacturing and Quality
Assurance, will be sold to third parties.
Pursuant to the merger agreement, Stanford Telecom has also granted
Newbridge an option to acquire a non-exclusive license to its broadband
wireless technology which would be exercisable under a change of control
of Stanford Telecom.
€Newbridge moved into the broadband wireless market space last year and
at that time we expressed a conservative view of the potential revenue
from this business,€ said Alan Lutz, president and chief operating
officer, Newbridge Networks. €Since then we have won 15 new customer
contracts, we have been selected for 13 additional field trials, and we
are in discussions with 30 potential new customers. By acquiring
Stanford Telecom, we have acquired access to the source of the time
division multiple access (TDMA) technology which contributes to
differentiating our product offering from the competition.
€Under the acquisition, which we expect will be break-even in the first
year and accretive to Newbridge earnings thereafter, on an operating
basis, excluding goodwill. Newbridge will retain Stanford Telecom's
Wireless Broadband Products group, Telecommunications Components
Products group and the Satellite Personal Communications group. The
Newbridge wireless development team in Sunnyvale will become a center of
excellence for broadband wireless technologies, including development of
multiple access wireless modems, highly integrated subscriber units and
custom ASICs.
€Newbridge and Stanford Telecom have enjoyed a long-standing, successful
relationship. Stanford Telecom's unique technology has been integrated
into the comprehensive Newbridge LMDS solution,€ continued Mr. Lutz. €By
acquiring Stanford Telecom, Newbridge further extends its leadership
position in the broadband wireless market. We deliver the industry's
most powerful solution, extending from the broadband network core to the
customer premise. This enables service providers to reduce capital
outlay and enhance network performance, while capitalizing on the steep
demand for broadband wireless services through a solution with quality
and reliability equal to or better than that available over wireline
facilities, such as fiber.€
"Newbridge knows the Stanford Telecom team ? the people, the culture and
the technology ? and Stanford Telecom knows the Newbridge team," said
Dr. Val P. Peline, president and chief executive officer, Stanford
Telecommunications. "Marrying the strengths of the two companies
delivers the industry leading solution from a single vendor that
immediately addresses a substantial global market opportunity."
This news release may include certain forward-looking statements that
involve risks and uncertainties. Actual results may differ materially
from results indicated in any forward-looking statements. Newbridge
cautions that, among other things, in view of the rapid technological
changes in the networking industry, if technologies or standards
supported by Newbridge products or common carrier service offerings
based on Newbridge products become obsolete or fail to gain widespread
commercial acceptance, the Company€s business may be adversely
affected. Additional information identifying risks and uncertainties is
contained in the most recent Newbridge Form 10-Q quarterly report and
Form 10-K annual report filed with the SEC.
Stanford Telecom designs, manufactures and markets advanced digital
communications products and systems to establish or enhance
communications via terrestrial wireless, satellites and cable. Stanford
Telecom€s technical strengths include: system design, communication
waveforms, modulation and demodulation techniques, ASIC design, radio
frequency (RF) antennas and converters, software and firmware,
asynchronous transfer mode design and advanced manufacturing techniques
and processes. Stanford Telecom was founded in 1973, maintains
headquarters in Sunnyvale, California and employs over 1,000 people at
its various locations throughout the United States. News and information
are available at www.stelhq.com.
Newbridge Networks designs, manufactures, markets and services wide area
networking solutions for Internet service providers; local,
long-distance, and wireless communications companies; cable television
carriers; and enterprise customers in more than 100 countries. The
Company leverages its relationship with more than 20 Newbridge Affiliate
companies and strategic alliances with numerous other networking
companies to deliver complete, end-to-end solutions. Newbridge customers
include the world€s 350 largest telecommunications service providers and
more than 10,000 corporations, government organizations and other
institutions. Founded in 1986, the Company employs more than 6,000
people on six continents. News and information are available at
www.newbridge.com.
- end -
Newbridge and logo are registered trademarks of Newbridge Networks
Corporation.
Stanford Telecom and Stanford Wireless Broadband are registered
trademarks of Stanford Telecommunications Inc.
Newbridge Networks and Stanford management will be hosting a conference
call on Tuesday, June 22nd at 5:30 p.m. Eastern Daylight Time.
Telephone Conference Call
Please call in 10 minutes prior to the start of the call
North America: 1-800-553-3709
International: 1-303-267-1007
Audio Web Cast (listen only mode)
Newbridge web site: www.newbridge.com |
