3Com® Corporation Acquires
Leading LAN Telephony
Vendor NBX Corp.,
Accelerates Move To
Converged Networks
Santa Clara, Calif., — Feb. 22, 1999 —
Continuing to drive the convergence of voice, video
and data communications, global networking
leader 3Com Corporation (Nasdaq: COMS) today
announced a definitive agreement to acquire
Andover, Massachusetts-based NBX Corp. NBX is
a leading developer of reliable and powerful
network-based telephony systems that integrate voice and data
communications over small business LANs and WANs. Through this
acquisition, 3Com further accelerates its development and deployment
of converged network solutions, products and services. Small
businesses around the world will benefit by NBX's leading technology
becoming more readily available and supported by 3Com.
3Com is the leading supplier of networking systems and products to
small and medium businesses for Internet access, sharing of office
computers and remote access for mobile workers. Today's
announcement adds an entirely new capability for increased
productivity: consolidation of voice and data information onto a single
network, resulting in dramatic cost savings and setting the stage for a
new generation of converged applications. According to 3Com's
estimates, the worldwide market for LAN telephony will be
approximately US$5 billion by 2003 with more than two-thirds of the
sales going to small and medium enterprises.
An important element of the acquisition is the immediate development
of a new and comprehensive distribution and U.S. sales channel for
LAN telephony products. NBX's sales force will be an important
channel for all of 3Com's existing and upcoming voice products. In
addition, NBX's products will now become more widely available
through 3Com's traditional worldwide network of 65,000 channel
partners, 20,000 of whom are focused on small business.
3Com already has a strong presence in the telephony market. Over the
past few months 3Com has made three strategic announcements.
3Com and telecommunications market leader Siemens AG announced
their joint venture in December 1998 to develop a rich set of LAN
telephony and multimedia products that will change the way
businesses build and operate their data and voice communications
networks. Through a previous alliance, the two companies have already
delivered their first product, the SuperStack II PBX 1000.
The new Pathbuilder™ S200 voice access switch family, announced in
October 1998, enables customers to add voice to existing, router-based
wide area data networks. Incorporating voice, as well as fax and
modem traffic, into these networks enables more efficient use of
expensive wide area bandwidth and offers a powerful alternative to
traditional, separate voice solutions.
Voice Over IP capabilities have been added to 3Com's Total Control™
remote access concentrator. This represents one of the industry's first
major efforts at combining multiple services in a single platform as
today's Internet access evolves into multimedia, real-time
communications and services.
Transaction Terms
The transaction is valued at approximately US$90 million in cash and
the assumption of stock options, and will be accounted for as a
purchase. The transaction, which is scheduled to close in March, is
expected to be dilutive in the near-term, with an impact on earnings
per share in the fourth fiscal quarter of approximately $.02 - $.03,
exclusive of a one-time charge for in-process technology. The in-process
technology charge is currently being evaluated, but is expected to be
less than 20 percent of the purchase price.
LAN Telephony: Driving Converged Infrastructures
3Com's acquisition of NBX creates new opportunities for small
businesses. NBX's products deliver all the benefit of converged voice
and data applications without the administrative burden and excessive
price of traditional telephone systems. Businesses save money by more
than halving the cost of building a voice and data network
infrastructure by combining voice and data on the same wire.
Moreover, NBX products create the opportunity for new generations of
combined voice and data applications, such as low-cost call centers.
"LAN telephony is a market that's here and now," said Edgar Masri,
senior vice president and general manager of 3Com's enterprise
business unit. "NBX's 90 employees have created a catalogue of
products, a proven channel of distribution and an installed base of
customers. As both a technology and market leader, NBX is a strategic
acquisition that supports 3Com's comprehensive approach to network
convergence. 3Com's acquisition of NBX, together with 3Com's joint
venture with Siemens, immediately creates a complete range of LAN
telephony solutions for small, medium and large enterprises."
"In small and medium-size enterprises, 3Com is the undisputed
leader," said Daniel J. Massiello, president and chief executive officer
of NBX Corp. "Standing on the shoulders of 3Com's leadership in LAN
and WAN solutions for this market, NBX gives 3Com's channels and
customers the immediate opportunity to profit from network
convergence, specifically in the category of LAN telephony."
Synergy Between 3Com Siemens Joint Venture and NBX
"There's a natural synergy between the 3Com - Siemens joint venture
and NBX," said Masri. "The 3Com - Siemens joint venture is focused on
opportunities in medium and large enterprises. NBX is focused on
small businesses. Together, 3Com has a complete LAN telephony
solution - including a proven worldwide distribution channel and
worldwide support."
About NBX Corporation
NBX Corporation is the developer of a reliable, quality network-based
business telecommunications solution. The powerful NBX 100™
Communications System delivers a feature-rich, cost-effective means
for growing businesses to consolidate both voice and data on one
network infrastructure, providing a single point of browser-based
administration and management. Utilizing NBX's Network Based
eXchange™ digital end-to-end voice processing technology, NBX makes
it possible for business customers to reduce their overall cost of
ownership of voice and data networks. The NBX 100 delivers improved
productivity and seamless scalability to small organizations and remote
users. NBX network-based telephony delivers the power of a local area
network (LAN) with every system, supporting LAN, WAN, and Internet
connections for every user of the NBX 100.
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.™ For further information, visit
3Com's World Wide Web site at www.3com.com or the press site at
www.3com.com/pressbox.
3Com and SuperStack are registered trademarks and More connected, PathBuilder and Total
Control are trademarks of 3Com Corporation. NBX is a registered trademark of NBX
Corporation, and Network Based eXchange and NBX 100 are trademarks of NBX Corporation.
All other company and product names may be trademarks of the respective companies with
which they are associated.
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