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To: Scrapps who wrote (7253)	11/22/1999 8:49:00 AM
From: Paul Lee	Read Replies (2) \| Respond to of 9236

DSL Leader Efficient Networks, Inc. Acquires FlowPoint Corporation In $861 Million Stock Transaction Acquisition Creates DSL CPE Powerhouse With Widespread Product Interoperability DALLAS, Nov. 22 /PRNewswire/ -- Efficient Networks, Inc. (Nasdaq: EFNT), a worldwide developer and supplier of high-speed digital subscriber line (DSL) customer premise equipment (CPE) for the broadband access market, today announced that it has signed a definitive agreement to acquire FlowPoint Corporation, a wholly-owned subsidiary of Cabletron Systems (NYSE: CS). Based in Santa Clara, Calif., FlowPoint is a leading provider of advanced broadband routers for communications networking in the customer premises equipment market. According to the Dell'Oro Group, FlowPoint holds the leading market share in the SDSL and IDSL router market; the acquisition will result in Efficient offering the industry's most complete and technologically advanced DSL CPE product line. Under terms of the agreement, which was approved by the board of directors of both companies, Cabletron will receive 7.3 million shares of common and 6.2 million shares of non-voting convertible preferred stock of Efficient in exchange for all of the outstanding capital stock of FlowPoint Corporation. Based on the November 19, 1999 closing stock price for Efficient of $63.75, the transaction has an implied value of approximately $861 million. FlowPoint has a current annualized revenue run rate in excess of $40 million. The transaction, which is expected to be completed late in Efficient's second fiscal quarter ending December 31, 1999 or early January 2000, will be accounted for as a purchase and is intended to qualify as a tax-free reorganization. Efficient expects the merger to be accretive to revenues per share immediately. "This merger positions Efficient as the clear leader in DSL CPE and should have a significant, positive impact on the long term value of the combined company," said Mark Floyd, chairman, president and chief executive officer of Efficient Networks. "Virtually every major network service provider worldwide is making decisions on how to engineer and deploy its new or evolving broadband access network for data, voice, fax and video services," Floyd continued. "With this combination, we intend to lead the short list of companies with whom those providers will want to work. In addition to increasing our customer base, this acquisition broadens our DSL product line and gives us the edge as we develop the next generation of DSL CPE." Efficient now supports five distinct DSL CPE product categories: internal and USB DSL modems for personal computers, DSL LAN modems, SOHO/telecommuter DSL routers and small business or branch office DSL routers. Additionally, FlowPoint accelerates Efficient's entry into the VoDSL market. FlowPoint currently has a VoDSL product in trials with major service providers, which is interoperable with a new line of voice gateway products from CopperCom and Jetstream. FlowPoint designs, manufactures and markets a comprehensive line of remote access products for broadband connectivity services featuring a broad range of xDSL technologies, including ADSL (both G.DMT and G.lite), SDSL and IDSL. The FlowPoint product line will further bolster the company's importance as a supplier to an unmatched blue-chip customer base which includes major ISPs, PTTs, ILECs, IXCs, and CLECs. "This transaction takes us to the next level of business opportunities," said Chuck Waggoner, president of FlowPoint. "Efficient enables us to give customers a more robust, end-to-end solution, and it complements FlowPoint's market-leading technology. Our people get the chance to join an industry leader that has been driving market adoption of DSL equipment across the full range of service providers." Following the completion of the transaction, FlowPoint's management, employees and product lines will be operated by Efficient. Efficient expects to establish significant development and sales operations in Silicon Valley, where the majority of FlowPoint's employees will continue to be based. FlowPoint's president, Chuck Waggoner, will remain with the company as a key member of Efficient's senior management team. The purchase is subject to customary closing conditions. The convertible preferred stock will convert on a one-for-one basis into common stock immediately on approval by a majority of holders of Efficient common stock. Efficient has received voting agreements from holders of a majority of its shares of common stock agreeing to vote in favor of the conversion. In connection with the merger, Efficient and Cabletron will enter into a shareholder's agreement containing customary provisions regulating Cabletron ownership of the Efficient stock received in the merger and granting Cabletron certain registration rights.

To: Scrapps who wrote (7253)	11/23/1999 8:28:00 AM
From: Paul Lee	Respond to of 9236

Early Market Leaders in ADSL and CABLE Modems Feeling the Heat; In Q3 1999 According to New In-Stat Report SCOTTSDALE, Ariz.--(BUSINESS WIRE)--Nov. 23, 1999--According to a recent report released by Cahners In-Stat Group, worldwide ADSL modem shipments grew 74 percent sequentially in Q3 99, and are expected to top 1.2 million shipments worldwide by the end of 1999. Cable modems posted stable growth of 27 percent, still out-shipping ADSL modems by two to one. Cable and DSL services continue to ramp in Q3, broadening availability and introducing new competitors to the market. Early market leaders in ADSL and Cable Modems experienced either negative or flat market share growth in Q3 1999. Alcatel and Cisco, which represented 55 percent of the ADSL modem market in Q3 1998, now total only 36 percent of the market. While Alcatel still holds the number one position, CPE specialist Efficient Networks claimed the number two position in Q3 1999. This market share shift is indicative of the trend toward specializing in either CO or CPE hardware as the distribution model for DSL diversifies. Cable modem market leaders, Motorola and Nortel Networks are feeling similar competitive pressure to hold their leadership positions. Today, Motorola and Nortel Networks are still the leaders in cable modem shipments with 27.4 percent and 14.5 percent unit share respectively, significantly down from Q3 1998. Motorola and Nortel represented 68 percent of cable modem shipments this time last year compared to 42 percent in Q3 1999, demonstrating how the changing dynamics in the cable modem market are shifting share from early market entrants to vendors with experience in high volume consumer products. "Early market leaders in digital modem shipments are being forced to specialize, partner, and/or acquire if they want to maintain share in this rapidly growing market," said Shannon Pleasant, senior analyst for In-Stat's Voice and Data Communications Group. "As the distribution model for digital modems becomes increasingly diverse, vendors with experience in high volume, low cost, low maintenance products will become a significant threat to those vendors unable to adapt." The report, Q3 99 Analog and Digital Modem Market Analysis, No. CQ9904M7, provides quarterly market shares for analog, cable and ADSL modem vendors and three quarterly rolling forecasts for those markets. To purchase the report please call 617/630-2139 or visit instat.com . Cahners In-Stat Group (http://www.cahnersinstat.com) covers the full spectrum of digital communications research from vendor to end-user, providing the analysis and perspective that allows technology vendors and service providers worldwide to make more informed business decisions. CONTACT: Cahners In-Stat Group Shannon Pleasant, 480/483-4460 email: spleasant@instat.com Christina Hecht, 480/483-4443 email: checht@instat.com www.instat.com