3Com Corporation Acquires EuPhonics, Inc.; Accelerates Move to
Converged Networks - BW, DEC 04,1998 12:00 EASTERN
SANTA CLARA, Calif.--(BUSINESS WIRE)--Dec. 4, 1998--Continuing to
drive the convergence of audio, video and data communications, global
networking leader 3Com Corporation (Nasdaq:COMS) today announced it
has acquired Boulder, Colo.-based EuPhonics, Inc.
EuPhonics is a leading developer of audio software that drives
integrated circuits, sound cards, consumer electronics and other
hardware. Through this acquisition, 3Com will create a new category of
products that merges desktop and mobile modems and network interface
cards with sound capabilities to drive IP telephony, LAN telephony and
streaming multimedia.
The transaction, valued at $8.3 million, includes cash for the
outstanding shares, assumption of EuPhonics employee stock options,
and transaction costs, and will be accounted for as a purchase. The
charge for in-process technology associated with the acquisition is
not material and will be included in research and development expenses
in the second quarter of fiscal 1999.
The remaining purchased technology and goodwill will be amortized
over a period of four years. The acquisition is not expected to
materially impact 3Com's fiscal 1999 results.
Audio: Critical Internet Medium
Audio is an increasingly important media type in our connected world.
MP3-encoded music, and speech and music streamed over the Internet,
deliver information or entertainment. Telecommunications - particularly
voice over IP -- continues to be a growing application for computers.
The integration of the technology developed by EuPhonics and 3Com is
expected to improve the user experience, lower cost and simplify system
design.
3Com/EuPhonics: Driving Network Convergence
The acquisition of EuPhonics allows 3Com to drive the integration of
PC-based multimedia audio with 3Com's leading communications products.
3Com will now be able to integrate audio and communications solutions
for PC OEMs, consumers and every size of enterprise beginning in
Spring 1999.
"Acquiring EuPhonics' world class audio expertise is a windfall for
3Com," said Bob Suffern, vice president of business development for
3Com's personal communications division. "Adding EuPhonics' audio
expertise to 3Com's industry-leading modem and NIC products will speed
the deployment of IP telephone, LAN telephony and improve the networked
multimedia experience."
Microsoft on 3Com and Euphonics
"Individually, 3Com and EuPhonics have both made significant contributions
to the Windows platform. 3Com's long history of working with Microsoft
on modem technology along with EuPhonics' work to help us innovate the
DirectSound and forthcoming DirectMusic APIs bring extraordinary value
to consumers who work, learn and play on Windows-based platforms,"
said Aaron Higgins, technical evangelist at Microsoft Corp. "Combined,
we look forward to the great advances they will help bring to Windows
users."
"EuPhonics is thrilled by 3Com's drive to integrate audio and communications,"
said Jeff Barish, founder of EuPhonics, Inc. "EuPhonics' unparalleled
audio assets and expertise will audio-enrich 3Com's branded, end-to-end
networking products. Job one for the EuPhonics team is the rapid
integration of our technology into 3Com's products. There are great
opportunities to improve consumer experiences over an IP connection and
to rationalize the audio/comms subsystems of OEMs."
Will Strauss of DSP market watcher Forward Concepts said, "It appears
to be a smart move by both parties. 3Com has already demonstrated the
benefits of field-upgradeable consumer products with their X2 to V.90
modem migration. The easy upgrade of programmable DSP platforms
appeals to OEMs as both a cost-saving technique as well as a method of
obsolescence-proofing their products."
Strauss went on to say, "EuPhonics has a unique audio IP portfolio which
can be easily ported to the same DSP platform that provides the PC
connectivity for which 3Com is famous. Forward Concepts has long
extolled the benefits of DSP-based products of the type that 3Com can
offer through this acquisition, and it represents another step toward
what will soon become the DSP century."
Convergence of modem and audio technology is demonstrated by the increased
integration into modems of telephony features such as telephone answering
machines and full duplex speakerphone capabilities.
Another area of explosive growth is on-line gaming, which requires both
high quality audio as well as the fastest data communications solutions.
The integration of audio and communications can enhance all of these
activities while lowering the overall system and support costs to the
PC OEM.
EuPhonics, Inc.
EuPhonics, Inc. is based in Boulder, Colo. and has 14 employees. It develops software that drives the hardware of music
synthesis industries. Founded in 1987, EuPhonics licenses music synthesis and audio effects software to volume
manufacturers of integrated circuits, sound cards, computers, consumer electronics, and games. EuPhonics has provided
technology for industry leaders Analog Devices, Digidesign, Emu, Lexicon, Roland, S3, VLSI Technologies, and Yamaha.
About 3Com Corporation
With more than 200 million customers worldwide, 3Com Corporation connects more people to information in more ways
than any other networking company. 3Com delivers innovative information access products and network system solutions
to large, medium and small enterprises; carriers and network service providers; PC OEMs; and consumers. 3Com - More
connected.(TM) For further information, visit 3Com's World Wide Web site at www.3com.com or the press site at
www.3com.com/pressbox.
Note to Editors: 3Com and Winmodem are registered trademarks, and More connected is a trademark of 3Com
Corporation. EuPhonics and SoundCore are trademarks of EuPhonics, Inc. Microsoft is a registered trademark of Microsoft
Corporation. All other company and product names may be trademarks of the respective companies with which they are
associated.
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CONTACT: 3Com Public Relations
Mark Bingham, 408/326-3439
mark_bingham@3com.com
or
3Com Investor Relations
Shirley Stacey, 408/326-6301
shirley_stacy@3com.com
KEYWORD: CALIFORNIA COLORADO
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
MERGERS/ACQ
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