3Com Acquires OnStream Networks; Reinforces Commitment to Networking Industry Leadership.SANTA CLARA Santa Clara, city, Cuba Santa Clara (sän`tä klä`rä), city (1994 est. pop. 217,000), capital of Villa Clara prov., central Cuba. , Calif.--(BUSINESS WIRE)--Oct. 7, 1996-- 3Com Systems to Offer Enterprises and Network Service Providers A Simpler, Lower Cost ATM LAN/WAN LAN/WAN Local Area Network/Wide Area Network Solution 3Com Corporation (Nasdaq:COMS COMS 3Com Corporation (stock symbol) COMS Certified Orientation and Mobility Specialist COMS Continuous Opacity Monitoring Systems COMS City of Manchester Stadium (UK) ), the world's second largest networking company, today underscored its commitment to become the leading supplier of networking solutions worldwide by signing a definitive agreement to acquire OnStream Networks OnStream Networks was a Santa Clara, California-based supplier of Circuit Emulation Service (CES) based Asynchronous Transfer Mode (ATM) solutions. They used the AAL1gator designed by Network Synthesis and acquired by Integrated Telecom Technology (later acquired by , Inc., a leading provider of Asynchronous Transfer Mode See ATM. (communications) Asynchronous Transfer Mode - (ATM, or "fast packet") A method for the dynamic allocation of bandwidth using a fixed-size packet (called a cell). See also ATM Forum, Wideband ATM. ATM acronyms. Indiana acronyms. (ATM) and broadband wide area network (WAN) and access products. The acquisition of OnStream extends 3Com Systems' leadership in the enterprise ATM market and strengthens its available product solutions for the network service provider (NSP (1) (Network Service Provider) An organization that provides a high-speed Internet backbone to ISPs and other service providers. Sprint, MCI and UUNET are examples of NSPs. See Internet backbones. ) and Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. ) markets. Among other benefits, the acquisition will enable 3Com Systems to offer customers standards-based, cost-effective solutions for integrating legacy traffic from multiple data, video and voice networks, and adapting it to ATM for transport over the local and wide area network. For many customers, these solutions provide a lower cost alternative to competitive ATM LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. and WAN switching products currently on the market. Under the terms of the agreement, 3Com will exchange 3.8 million shares and options to purchase its shares for all outstanding shares and options of OnStream. Based upon the closing price of 3Com common stock on Friday, October 4, the transaction is valued at approximately $245 million. The combination will be accounted for as a pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. and pending standard regulatory approvals is expected to close by November 30. Concurrent with this agreement, the companies have signed a standard OEM (Original Equipment Manufacturer) The rebranding of equipment and selling it. The term initially referred to the company that made the products (the "original" manufacturer), but eventually became widely used to refer to the organization that buys the products and agreement that will allow 3Com to immediately purchase and resell OnStream's ATM and other broadband product lines. "This is a strategic acquisition for 3Com in the WAN access space, allowing us to continue driving toward complete leadership in supplying wide-area networking solutions for both enterprise and NSP customers," said Eric Benhamou, chairman and chief executive officer of 3Com. "With the addition of OnStream, 3Com will continue to spearhead the proliferation of open networking platforms, reinforcing our belief that interoperability with the installed base of networking equipment is of paramount importance to our customers." Innovative solutions today that scale for tomorrow As networking becomes more pervasive, large enterprises are looking to migrate their existing networks to consolidated standards-based, high performance ATM switched networks. This will allow for efficient integration of voice and video with data as well as cost-effective access to a host of wide area services. Similarly, NSPs and ISPs are demanding standards-based solutions for seamless transmissions between public carrier services and customer premises equipment See CPE. . OnStream's solutions for concentrating legacy network traffic for access to high-speed ATM networks, as well as their solutions for intelligently managing network bandwidth, further extends 3Com's Transcend Networking framework for building and managing networks. OnStream's products are currently used by some of the world's largest enterprises and network service providers to allow them to scale the performance and extend the reach of their operations. Through direct sales, OEM agreements and partnerships with leading ATM switch vendors, many of today's large enterprises and NSPs/ISPs rely on OnStream's innovative nxT1/E1, T3/E3, SONET and ATM products to adapt and transport voice, data and video communication. "We've worked closely with our large ATM customers and fully understand their long-term requirements," said Bob Finocchio finocchio: see fennel. , president, 3Com Systems. "The combination of 3Com and OnStream systems will create the only solution that can cost-effectively aggregate voice, data and video traffic across both the LAN and the WAN today. Further, 3Com will have the most comprehensive set of standards-based interfaces to public carrier services, thereby ensuring interoperability with existing LANs and WANs. In short, our ability to offer 3Com customers a more complete, cost-effective migration path to ATM just got better." "3Com and OnStream share a common vision of standards-based LAN/WAN integration," said OnStream president, James Mongiello. "3Com's ATM expertise in the LAN and increasing presence in the wide area are perfect complements to OnStream's core strengths in ATM/broadband access to public carrier services. Together, we can accelerate the deployment of ATM services over the wide area and provide an unparalleled end-to-end ATM solution to the broadest group of customers." 3Com's new Broadband Access See broadband and wireless broadband. division OnStream will become the Broadband Access division of 3Com's WAN Operations within 3Com Systems and the OnStream sales force will join 3Com Systems dedicated Network Service Provider sales force. James Mongiello will become a 3Com vice president and general manager of the newly-formed division, reporting to Jim Olson Jim Olson (b. 1940) is the founding principal of the Seattle-based firm Olson Sundberg Kundig Allen Architects. He is best known for residential design, often for art collectors, though his designs have also included museums, commercial spaces and places of worship. , WAN Operations' senior vice president. WAN Operations includes 3Com's remote access, Internet and Intranet solutions as well as its Internet service provider/network service business. "We are excited to begin leveraging OnStream's engineering expertise as well as their strong relationships with NSPs, ISPs and ATM switch vendors," said Olson. "Their focus on standards, interoperability and preserving customers' existing investments in networking technology are an excellent strategic fit with 3Com Systems' growing portfolio of ATM LAN and WAN solutions." OnStream Networks, Inc., located in Santa Clara, is the global leader in delivering broadband wide-area network access products. Its innovative products are used by the world's largest service providers, businesses and the Internet itself to bring users online to high-speed broadband services and applications. For more information, please visit the web site at http://www.onstream.com. 3Com Corporation has helped more than 36 million people gain access to critical information through high speed networks. Designed to serve large enterprises, service providers, small offices and homes, 3Com products provide a scalable architecture to meet the immediate and long term connectivity needs of today's users. With research and development on three continents, 3Com is one of the data networking industry's largest and fastest growing companies. The company's innovative engineering, marketing, sales and support simplify communication, optimize network reliability and protect customer investments. For further information, visit 3Com's World Wide Web site at http://www.3Com.com. -0- NOTE TO EDITORS: 3Com is a registered trademark of 3Com Corporation. CONTACT: 3Com Investor Relations Investor relations The process by which the corporation communicates with its investors. Bill Slakey, 408/326-1286 Bill_Slakey@3Com.com or 3Com Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most Leslie Davis, 408/764-7187 Leslie_Davis@3Com.com or 3Com Public Relations-Trade Jennifer Wade, 408/764-5137 Jennifer_Wade@3Com.com or OnStream Networks, Inc. Laura Stiff, 408/986-4234 laura@onstream.com |
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