Acquisition Gives Ditech Key Optical Networking Systems Expertise
MOUNTAIN VIEW, Calif., June 22 /PRNewswire/ -- Ditech Communications
Corporation (Nasdaq: DITC) today announced it has signed an agreement to
acquire privately-held Atmosphere Networks, Inc. of Campbell, California in a
stock and cash merger. Atmosphere Networks is an emerging provider of optical
networking products, enabling carriers to combine various types of traffic
(voice, data and video) onto an optical network.
Under the terms of the agreement, the stockholders of Atmosphere Networks
will receive merger consideration valued at $88.5 million, provided that if
the average closing price of a share of Ditech common stock for a designated
period prior to the closing is less than $73.75, the merger consideration will
be valued at 1,200,000 shares of Ditech common stock, and if such average
closing price is greater than $88.50, the merger consideration will be valued
at 1,000,000 shares of Ditech common stock. The actual merger consideration
will consist primarily of Ditech common stock, provided that certain holders
of Atmosphere Networks common stock will receive cash (estimated not to exceed
approximately $10 million) upon the consummation of the merger. Ditech is also
expected to grant the Atmosphere Networks employees 4-year vesting stock
options covering up to 750,000 shares of Ditech common stock at a price
representing up to a 50% discount to market.
The acquisition will be accounted for under purchase accounting and is
expected to close in the first quarter of Ditech's fiscal year 2001. The
Company is still evaluating the extent of any purchased in-process R&D
write-off associated with this acquisition. To the extent such a write-off is
recognized, it will be reported as part of the Company's first quarter
operating results. The acquisition has been approved by the respective boards
of directors of Ditech and Atmosphere Networks, and is subject to the approval
of the stockholders of Atmosphere Networks as well as other customary closing
conditions. The acquisition is expected to be dilutive to earnings per share
excluding amortization of goodwill, purchase technology, and other acquisition
related costs in the near term, but is not expected to result in a material
deviation from Ditech's operating plan for 2001 exclusive of acquisition
related costs.
"This acquisition is a bold move to expand our optical business, instantly
giving us critical mass in optical networking disciplines which should
dramatically improve the time-to-market for our new optical projects," said
Tim Montgomery, Ditech's President and CEO. "Through the development of our
DWDM subsystem products, including our optical amplifiers, we have developed
tremendous photonics and optical transport expertise. When combined with the
network control plane expertise provided by Atmosphere Networks, we are poised
to deliver industry-leading solutions for the optical transport layer."
Continued Montgomery, "With this acquisition, Ditech is sending a strong
signal that we are aggressively expanding our optical networking development
plans beyond our current suite of products. We double our optical engineering
team and add critical personnel in sales and marketing. Furthermore, we will
fill a significant percentage of our current headcount needs, which we believe
is a significant achievement in a very challenging hiring environment. With
our optical transport expertise and Atmosphere Networks' data networking
system expertise, Ditech is poised to drive to a leadership position in the
optical networking business."
Atmosphere Networks
Founded in 1997, Atmosphere Networks is a leading player in providing
solutions for the optical network. Atmosphere Networks enables
telecommunications carriers to take full advantage of optical networks'
capacities and offer their customers flexible voice-and-data service packages.
With Atmosphere Networks' products, carriers can boost their competitiveness
while lowering their network costs. The privately held company is backed by
Benchmark Capital, Foundation Capital, Institutional Venture Partners (IVP),
Bowman Capital, Volpe Brown Whelan & Company and other venture firms. For more
information on Atmosphere Networks, visit the web site at:
atmospherenetworks.com .
Ditech Communications Corporation
Ditech Communications Corporation is a global telecommunications equipment
supplier for voice and data networks. Ditech's voice products are
high-capacity echo cancellers that utilize advanced software and digital
signal processor (DSP) technology. This unique combination of software and
hardware allows Ditech to deliver Voice Quality of Service (VQoS(TM)), a
robust and cost-effective solution for voice enhancement and echo
cancellation. Ditech's products for data networks provide building blocks for
high-speed, high-capacity backbone networks. These products are based on
wavelength division multiplexing (WDM), a technology that enables many
wavelengths of light, each carrying multiple gigabits of information to be
carried on one fiber optic connection. With Ditech's WDM products, network
equipment companies and service providers can quickly and cost-effectively
expand their network capacity to meet the growing demands of the Internet age
without incurring the vast time and expense of laying new fiber optic cable.
Ditech (DITC) is listed on the Nasdaq National Market and is headquartered in
Mountain View, California (Web site: ditechcom.com).
This press release contains forward-looking statements regarding Ditech's
products and business. The benefits Ditech expects to realize as a result of
the Atmosphere Networks acquisition could vary materially as a result of
unanticipated factors and events, including those detailed from time to time
in the reports and other filings Ditech makes with the Securities and Exchange
Commission, including in Ditech's prospectus dated October 5, 1999.
SOURCE Ditech Communications Corporation
Web Site: ditechcom.com |
