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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: Dennis R. Duke who wrote (9184)	1/28/1999 7:58:00 AM
From: Chris Stovin	Read Replies (1) \| Respond to of 18016

Dennis, here's a play that might be intriguing... Thursday, January 28, 1999 LOCAL BUSINESS Thursday 28 January 1999 Another Newbridge affiliate to go public Bert Hill The Ottawa Citizen Tundra Semiconductor Corp. will go public with a share offering that puts the value of the company $20 million higher than many analysts were expecting a month ago. In response to strong interest from the investment community, Tundra said yesterday it is pricing the initial public offering at $9.25 a share, at the high end of the anticipated range for the 5.4-million-share offering. That puts the total market value of the Kanata-based chip-design firm at $120 million and will raise $50 million for Tundra and its major investors. Tundra president Adam Chowaniec said the company picked the price because the market has reacted positively to the first major offering of a new stock issue since a slump in stock market prices late last year. Investors will get a chance Feb. 8 to determine the market value of the shares when they start trading on the Toronto Stock Exchange. Tundra will get $34 million to finance its activities before brokerage and legal expenses. Newbridge Networks, which currently owns 37 per cent of the affiliated company, plans to reduce its holdings to about 16 per cent. It will get $15 million before brokerage and legal expenses. Other major shareholders are the Vengrowth Investment Fund of Toronto with about 14 per cent and employees, directors and senior offices with about about 10 per cent. Mr. Chowaniec said the company will use net funds of about $31 million to finance research and development of the custom wafers it designs, to acquire licences and for possible future acquisitions. Tundra designs chips used to network products in telecommunications, wireless and data communications, defence and industrial automation. It also moving aggressively into embedded chips used increasingly in a wide range of products. Tundra is the second Newbridge affiliate to go public. CrossKeys Systems Corp. went public in 1997 with an offering of 2.9 million shares at $14.95 each.

To: Dennis R. Duke who wrote (9184)	1/28/1999 8:10:00 AM
From: Chris Stovin	Respond to of 18016

Thursday, January 28, 1999 Tundra set to hit market By SUSAN TAYLOR, Ottawa Sun TUNDRA Semiconductor Corp. will close its initial public offering Feb. 8 with shares priced at $9.25. Underwriters, led by Merrill Lynch Canada Inc., will buy about 5.4 million common shares and offer them for sale to the public. That will earn Tundra about $34 million and Newbridge Networks, which has a 37% stake in the affiliate firm, and other shareholders about $15.6 million. The TSE has conditionally approved listing Tundra under the symbol TUN. The move comes after a highly-successful two-and-a-half week tour across Canada with stops in New York and Boston, said Tundra CEO Adam Chowaniec. The firm had expected to complete its IPO in March. "We got a good reception," he said. Shares are priced at the high end of a range set between $8 and $9.50. The underwriters have an option to buy up to 803,600 additional common shares from Newbridge to cover any over-allotment, for market stabilization. On completion of the offering, Tundra will have about 1.37 million outstanding shares. "It was massively oversubscribed," said Duncan Stewart, a Tera Capital Corp. partner who manages the Navigator Canadian Technology Fund. "Many institutions got cut back to 10% of their orders." The three-year-old firm will use the funds for R&D, to secure wafer fabrication capability and general corporate purposes. Led by Merrill Lynch, the IPO was also underwritten by CIBC Wood Gundy, TD Securities and Nesbitt Burns. The four firms will provide analyst coverage of the company. "We feel that over the next couple of years, we are going to get the attention we deserve," said Chowaniec. Tundra will consider a listing on the U.S. Nasdaq market, to boost its exposure, in two to three years, he added. Enthusiasm for the firm is rooted in Tundra's strong semiconductor market niche and interest in Newbridge affiliates, Chowaniec said. "They're in the right space," Stewart said. "They're not going to be as volatile as your average chip company." The firm has also shown growth in the 40-50% range. For the six months ending Nov. 1, 1998 Tundra revenues hit $12.5 million, up 41% over the same period last year. The gross margin was 53% of revenue, up from 48% in 1997. "We're a little unusual," Chowaniec said. "As a hi-tech company, we actually have earnings -- we're not just promising." Tundra is a fabless semiconductor company, meaning it doesn't manufacture the silicon wafers used for its chips. It designs and builds chips that bridge different technology protocols within embedded computer systems. In the past two years, more than 370 firms have bought Tundra products. Tundra said late last year it would delay its IPO because of the weak market for semiconductor firms. The sector began showing signs of recovery soon after and Tundra said Dec. 11 it would launch an IPO.