Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Son of SAN - Storage Networking Technologies -- Ignore unavailable to you. Want to Upgrade?

To: J Fieb who wrote (3242)	5/9/2001 2:58:11 PM
From: J Fieb	Respond to of 4808

Looks like FalconStor bought a slot on the NASDAQ...... Network Peripherals/FalconStor in reverse merger (UPDATE: adds quote, additional information, updates stock price) MELVILLE, N.Y., May 7 (Reuters) - Privately held storage software maker FalconStor Inc. on Monday said it agreed to combine with Network Peripherals Inc. (NasdaqNM:NPIX - news) in a reverse merger that would make FalconStor a publicly traded company. ADVERTISEMENT The all-stock deal would be valued at about $300 million, based on Network Peripherals' current market capitalization of about $107 million, people familiar with the transaction said. Following the completion of the merger, which is expected to close in the third quarter, the new company would be known as FalconStor Software Inc. and would be listed on the Nasdaq National Market under the stock symbol FNST. In addition to publicly traded status, the new company will acquire Network Peripherals' $80 million cash position. ReiJane Huai, who started FalconStor in February 2000, will become president and chief executive of the new company, which will not absorb Network Peripherals' business making software and chips for switches used in local area networks called ethernets. None of Network Peripherals' senior executives were slated to join the new company. Under the terms of the agreement, subject to shareholders' approval and customary and regulatory conditions, Network Peripherals will issue shares of its common stock for FalconStor shares. Upon completion of the transaction, FalconStor shareholders will own about two-thirds of the new company, with Network Peripherals holders owning one-third. Network Peripherals, which currently has about 13.4 million shares, will issue to FalconStor holders twice that amount of new shares. ``The strategic repositioning of NPI that will result from the merger will give us the potential to realize the high growth, high operating margins and profitability associated with successful software enterprises,'' Jim Regel, president and chief executive of Network Peripherals, said in a statement. Meanwhile, Network Peripherals said Lehman Brothers was exploring strategic alternatives for its existing hardware business and the company's nearly 120 employees will be let go in stages unless a buyer is found. As shareholders of one-third of the new storage software company, Network Peripherals holders, will be able to have a stake in an industry that has more growth potential than the one in which they currently find themselves, the company said. Shares of Network Peripherals closed at $8.09, up 4.25 percent or 33 cents, on the Nasdaq. In the past year, shares have traded as high as $24.75 and as low as $5.813. On April 2, Fremont, California-based Network Peripherals said FalconStor had invested $25 million to buy a ``significant'' stake in a deal that included an option to merge. In 1996, Huai sold Cheyenne Software, a maker of server-based backup, security and communications software, to Computer Associates International Inc. (NYSE:CA - news) for $1.3 billion. He left Computer Associates in 1999. Last week, FalconStor, which has 120 employees worldwide, completed a second round of Series C preferred stock financing, raising $8.15 million, bring the amount for the Series C round to a total of $33.15 million.