Lernout & Hauspie Strengthens Position in Dictation Product Arena
IEPER, Belgium and BURLINGTON, Mass.--(BUSINESS WIRE)-- June 8, 1998 --
L&H to Purchase the Dictation Consortium N.V. for $40 Million; Completes Securities Offering; Enters into Second Agreement with
Motorola, Lexicus Division
Lernout & Hauspie (NASDAQ:LHSPF)(EASDAQ:LHSP.ED) (L&H), a worldwide market leader in speech and linguistic technologies, products and services, today announced that it will buy for a total purchase price of approximately $40 million, the Dictation Consortium, N.V. This purchase will enable L&H to capture all revenues and resulting profits from sales of the licensed continuous dictation products. This announcement follows the recent successful completion of L&H's offering of preferred convertible securities that resulted in net proceeds of approximately $150 million, including the 20% over allotment.
Dictation Consortium Buyout
In September of 1996, L&H entered into a software development and commercial licensing agreement with the Dictation Consortium, funded by a group of private investors based in Belgium. According to this agreement, L&H agreed to pay the Consortium 50 percent of net revenues from L&H dictation product sales. Included within this agreement was a provision for L&H to purchase outright the commercial rights to the software owned by the Dictation Consortium.
"The buyout of the Dictation Consortium allows L&H to reap the benefits of our hard work in developing and customizing innovative dictation products, and of the rapidly growing market acceptance of voice recognition and dictation software," said Gaston Bastiaens, president and CEO of Lernout & Hauspie.
The Company expects the purchase of the Dictation Consortium to be accretive to the earnings per share, exclusive of a one-time write- off for in-process R & D during Q2 98.
Motorola, Lexicus Division License
In a separate announcement, L&H revealed that it has entered into an agreement with Motorola, Lexicus Division, to license Motorola's Chinese speech technology components and data. The agreement with Motorola should allow L&H to develop a high quality Chinese dictation product. The strong position of Motorola in China, particularly in sales and distribution channels, offers another important opportunity for future cooperation.
Additional Private Placement
In a separate development, L&H announced that the investment bankers have successfully completed the placement of an additional allotment of $26 million of ten-year Trust Preferred Income Equity Redeemable Securities, with a coupon of 4.75%. The conversion price of the securities is $56.85 per share. The original offering of $130 million was completed on May 21, 1998.
"This offering, led by Lehman Brothers, and supported by Cowen & Co., Robertson Stephens & Co., and Paribas Europe, was not only successful from a financial point of view, but also in bringing important institutional investors as shareholders of the Company," said Tom Doherty, Senior Vice President of Finance for L&H.
Bastiaens added, "The two transactions announced today are indicative of the manner in which L&H intends to use the funds from our recently completed private placement. In both instances, we have strengthened our position in the marketplace and enhanced our revenue potential."
About L&H
Lernout & Hauspie Speech Products (L&H) is an international leader in the development of advanced speech technology for various commercial applications and products. The Company is divided into four divisions: core speech technologies; dictation, a division dedicated to discrete and continuous speech offerings; translation services; and language technologies. Its four speech and linguistic technologies are automatic speech recognition (ASR), text-to-speech (TTS), digital speech compression and text-to-text (translation).
This Press Release contains forward-looking information, including but not limited to statements involving the Company's expected financial and other benefits from the transactions reported in this report, including the purchase of Dictation Consortium and license agreement with Motorola. There can be no assurance that actual result will not be materially different than those anticipated in these forward-looking statements. Factors which could cause actual results to materially differ from those anticipated in these forward looking statements include know and unknown risks, including risks inherent in new product introduction (there can be no assurance that the Company's recently introduced continuous dictation products will be as commercially successful as anticipated by the Company), uncertainty of new product development, uncertainty of dictation market growth, rapid technological change, and intense competition, as well as other risks set forth in L&H's filings with the Securities & Exchange Commission, including the Company's recently filed annual report on Form 20F. The forward-looking statements contained herein speak only as of the date of this press release. L&H expressly disclaims any obligations or undertakings to release publicly any updates or revisions to any such statement to reflect any change in L&H's expectations or any change in events, conditions or circumstances on which any such statement is based.
Lernout & Hauspie can be found on the World Wide Web at www.lhs.com. All product names and trademarks mentioned herein are registered trademarks of their respective owners. |
