Cabletron to Acquire FlowPoint Corporation and Ariel's Communications Systems Group; Launches Aggressive Broadband Initiative Targeted At Service Providers
ATLANTA (June 11) BUSINESS WIRE -June 11, 1998--Cabletron Systems
(NYSE:CS), a worldwide leader in computer networking, today announced
it has signed definitive agreements to acquire FlowPoint Corporation
and Ariel Corporation's Communications Systems Group. The acquisitions
are the cornerstone of a broadband initiative launched today at the
SUPERCOMM tradeshow, designed to address service-providers' growing
demand for higher-bandwidth, more reliable networking solutions.
Under terms of the definitive agreements, Cabletron will acquire
FlowPoint for $25 million in cash or stock, at Cabletron's election to
purchase the approximately 65 percent it does not already own.
Cabletron will also acquire Ariel's Communications Systems Group, for
$33.5 million in cash. Cabletron Offers Service Providers Digital
Subscriber Line Technology
These acquisitions bring critical remote access elements to Cabletron's
portfolio, including a high-density DSL central office concentrator
from Ariel, and award-winning, subscriber side equipment from
FlowPoint.
At the central office site, Ariel's Horizon II product is a carrier
class xDSL Access Multiplexer (DSLAM) capable of reducing network
congestion through support for ATM. For customer premise installations,
FlowPoint's access routers will provide consumers, telecommuters, small
businesses and branch offices with dependable, high-speed Internet
access.
"Today's announcement reflects our strategy to expand by acquiring
technologies that are key to the next-generation of networking," said
Craig Benson, Cabletron's chairman, CEO and co-founder. "By combining
these products with our existing SmartSwitch and SPECTRUM network
management offerings, we can provide intelligent solutions that
uniquely address customers broadband networking requirements." Market
Opportunity
The acquisitions aggressively position Cabletron in the extremely
fast-growing DSL market, which is expected by independent analyst IDC
to increase from $95 million (US) in 1998, to $1.6 billion by 2001.
Customer demand for bandwidth is increasing with escalating use of
Internet-powered applications such as electronic commerce, distance
learning, graphics-heavy web sites, telecommuting, telemedicine and
integrated voice, video and data services.
Using the existing telephone infrastructure, xDSL is well positioned to
support the demand for more bandwidth, while also providing the ability
to offload data from the public switched telephone network. xDSL offers
service providers an affordable, high-performance alternative to
satisfying increasing demands for bandwidth -- without requiring
significant network upgrades. About Ariel's Communications Systems
Group
Ariel Corporation (NASDAQ:ADSP) offers the industry's most robust
end-to-end ADSL/ATM systems, which give PC users ultra-high-speed,
round-the-clock access to the Internet, corporate Intranets, and
on-line services. About FlowPoint
FlowPoint designs, manufactures, and markets Customer Premise Digital
Subscriber Line (DSL) and ISDN network access products. The Company's
mission is to create superior-quality, full-featured products allowing
efficient, seamless network integration for businesses and home offices
using the Internet and corporate Intranets.
Founded in June 1993, FlowPoint is headquartered in Los Gatos,
California and distributes its products worldwide through system
integrators, distributors, private-label OEMs and its E-Commerce site.
About Cabletron Systems
Cabletron Systems, a recognized leader in high-performance computer
networking products, provides dependable network access and
communications to millions of people throughout the world under its
Smart Networking architecture. With scaleable products designed for
Fortune 1000 enterprise networks, service providers and small
businesses, Cabletron provides simple, reliable and cost-effective
business solutions for the information age. For more information,
contact Cabletron direct, or reach us on the web at
cabletron.com .
The statements of this news release concerning the anticipated benefits
of Cabletron's acquisition of the Communications Systems Group (the
"CSG") of Ariel Corporation ("Ariel") and the acquisition of all of the
issued and outstanding stock of FlowPoint Corp. ("FlowPoint")
constitute forward looking information, and actual results could differ
materially. The acquisitions of the CSG and FlowPoint involve numerous
risks including difficulties in assimilating the operations,
technologies and products of the CSG and FlowPoint, the diversion of
management's attention from other business concerns, risks of entering
markets and distribution channels for DSL products in which Cabletron
has no or limited direct prior experience and where competitors in such
markets have stronger market positions, and the potential loss of key
employees of the CSG and FlowPoint. These difficulties and risks could
have a material adverse effect on Cabletron's business, operating
results or financial condition. For a more detailed discussion of the
risks and uncertainties related to Cabletron's business, please refer
to Cabletron's form 10-K filed on May 29, 1998.
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CONTACT: Cabletron Systems
Melissa Morales, 603/337-1541
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