ADC Redefines Broadband Service Delivery in Operations Support Systems Software With Acquisition of CommTech.Business Editors & Technology Writers MINNEAPOLIS & CRANBURY, N.J.--(BUSINESS WIRE)--Feb. 5, 2001 Proposed Acquisition Strengthens ADC's Market Leading Singularit.e(TM) OSS Oss (ôs), city (1994 pop. 62,141), North Brabant prov., S Netherlands; chartered 1399. It is a significant industrial center. Manufactures include meat products, chemicals, pharmaceuticals, electrical equipment, and metalware. Solution by Adding Integrated and Comprehensive Order Management, Provisioning and Activation Capabilities ADC (1) See A/D converter. (2) (Apple Display Connector) A peripheral connector from Apple that combines digital video display, USB and power in one cable. (Nasdaq:ADCT ADCT Adaptive Discrete Cosine Transform , www.adc.com), a leading global supplier of fiber optics fiber optics, transmission of digitized messages or information by light pulses along hair-thin glass fibers. Each fiber is surrounded by a cladding having a high index of refractance so that the light is internally reflected and travels the length of the fiber , network equipment, software and integration services for broadband, multiservice networks, and CommTech Corporation (www.comm.com), a provider of end-to-end service order management, provisioning and activation software for communications service providers A Communications Service Provider or CSP is a company that transports information electronically. The term encompasses public and private companies in the wireline, wireless, Internet, cable, satellite, and managed services businesses. (CSPs), have signed a definitive agreement for the acquisition of CommTech by ADC. The proposed acquisition advances ADC's strategy to become the leading provider of end-to-end Operations Support Systems Operations Support Systems (also called Operational Support Systems or OSS) are computer systems used by telecommunications service providers. The term OSS most frequently describes "network systems" dealing with the telecom network itself, supporting processes such (OSS) solutions for broadband multiservice networks by simplifying broadband service See broadband and broadband service provider. delivery. The addition of CommTech's FastFlow(R) software suite provides critical service fulfillment capability to ADC's existing Singularit.e Customer Management, Billing and Service Assurance portfolio. The integration of the FastFlow suite will make this the most comprehensive OSS solution available. Deploying these "best-of-breed" components as a pre-integrated package provides added cost savings and operational efficiencies previously unachievable with stand-alone applications. For CSPs, this translates into life cycle savings measured by faster development and marketing of new service offerings, improved time to market to generate revenue, reduced operating costs operating costs npl → gastos mpl operacionales and enhanced end-user experience. Under the terms of the stock-for-stock transaction, ADC will issue approximately 13.25 million shares of its common stock for all outstanding equity interests in CommTech, including the conversion of existing CommTech employee stock options. Based on ADC's closing price of $14.00 per share on February 2, 2001, the transaction would have a value of approximately $185,500,000. The proposed transaction is expected to be completed on or before February 28, 2001, 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 treated as a tax-free reorganization for U.S. federal income tax purposes. Closing of the proposed transaction is subject to approval of CommTech' s stockholders and other customary conditions, although the parties have already received the necessary clearances under the Hart-Scott-Rodino Act Hart-Scott-Rodino Act Often used in risk arbitrage. Antitrust act administered by U.S. Department of Justice and the FTC that requires an investor to file a form with the government before he acquires an economic interest in the lesser amount of $15 million or 15% of the . After closing the transaction, ADC expects to take a non-recurring charge for various acquisition-related expenses the amount of which has not yet been determined. Excluding the non-recurring charge, ADC expects the acquisition to be non-dilutive to its earnings per share in the first twelve months after closing and accretive thereafter. THE OSS OPPORTUNITY The OSS market continues to experience rapid growth and opportunity. According to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. independent research firm The Yankee Group (the Yankee Group, Boston, MA, www.yankeegroup.com) A major market research, analysis and consulting firm founded in 1970 by Howard Anderson. It provides general consulting and strategic planning in the computer and communications field. , the total OSS applications and services market was approximately $32 billion in 2000 and is expected to surpass $38 billion in 2001. The fulfillment and provisioning sector is among the fastest growing sectors of this market. "This acquisition further positions ADC as a leader in the OSS market," said Rob Rich, executive vice president of The Yankee Group. "The service fulfillment and provisioning sector is among the fastest growing of the OSS market. Both CommTech and ADC understand these changing market dynamics and their combined vision of OSS simplification can reduce life cycle costs, speed new product introduction and make the difference between success and failure for CSPs. This transaction uniquely positions ADC as an end-to-end supplier in this growing and important market." EXTENDING ADC'S COMPETITIVE ADVANTAGE "We believe the addition of CommTech's FastFlow service fulfillment software will enable ADC to be the industry's breakthrough OSS leader. It extends ADC's ability to simplify and automate CSPs' OSS and business processes, enabling operational efficiency and bottom-line profitability," said Larry Ford, senior vice president of ADC and president of ADC's Integrated Solutions Group. "CommTech's offerings are market proven and their track record of innovation and expertise in best-of-breed software applications integrate perfectly with our team and broadband OSS strategy." "Joining forces with ADC provides CommTech with a powerful strategic advantage in building a world-class, end-to-end OSS solution for broadband communications providers around the globe," said Frank Fawzi, CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of CommTech. "We believe that there are tremendous opportunities to leverage our combined technical and operational expertise to jointly exceed our customers' goals of achieving profitability faster by attracting, winning and retaining consumer and business subscribers in a more efficient environment." ACQUISITION CREATES WORLD-CLASS BROADBAND OSS SOLUTION CommTech's FastFlow service fulfillment suite includes order management, flow-through provisioning and activation. These critical components will be added to ADC's Singularit.e OSS suite to create an integrated and comprehensive end-to-end solution (jargon) end-to-end solution - (E2ES) A term that suggests that the supplier of an application program or system will provide all the hardware and/or software components and resouces to meet the customer's requirement and no other supplier need be involved. Compare: turn-key solution. for CSPs and software systems integrators. Like Singularit.e, CommTech's offerings reduce CSPs' operational costs by helping them run their business more efficiently and by providing the scalability and flexibility to adapt to the changing dynamics of a broadband environment. The FastFlow solutions are architected to simplify integration and minimize costs. Furthermore, the solutions are open, making them interoperable with the Singularit.e suite and with other best-of-breed products and existing OSS environments. "As a competitive provider of voice and data services, it is imperative for Network Plus to streamline operations and continually introduce new and valuable services," said Jim Crowley James H. "Jim" Crowley (September 10 1902 – January 15 1986), American Football player and coach born in Chicago, Illinois, who gained fame as one-fourth of the University of Notre Dame's legendary "Four Horsemen" backfield [1]. , executive vice president and COO, Network Plus, an ADC and CommTech customer. "Adding ADC's vast resources and knowledge to the FastFlow software suite will significantly advance our ability to increase revenue, reduce operating costs and strengthen our business. This acquisition is testament to ADC's strategy of being a leading solutions provider in the broadband communications market." Through internal development and with the acquisitions of Saville Systems (1999) and Metrica (1996), ADC has developed the award-winning Singularit.e OSS suite. The Singularit.e suite automates key OSS processes by combining real-time convergent billing, connection management, advanced customer management and service assurance technology with integration services from leading consulting companies. Singularit.e solutions have been deployed by over 200 customers worldwide. CommTech has been at the leading edge of service fulfillment solutions development and their products have met widespread market acceptance. CommTech has more than 60 customers and partners, including CableVision, Network Plus and Verizon. Other customers include incumbent local and long-distance telephone companies, cable companies and new competitive service providers. Partners include network solutions providers, systems integrators, business consultants and independent software vendors. CommTech has been recognized twice by Inc. magazine as one of the 500 Fastest Growing Private Companies in the U.S and was recently awarded the prestigious Frost and Sullivan, Market Engineering Product Differentiation Product Differentiation A source of competitive advantage that depends on producing some item that is regarded to have unique and valuable characteristics. Innovation Award. ADC's SOFTWARE ACQUISITIONS The proposed acquisition of CommTech marks the fifth communications software (communications, software) communications software - Application programs, operating system components, and probably firmware, forming part of a communication system. These different software components might be classified according to the functions within the Open Systems acquisition by ADC in the last five years. Other acquisitions include Metrica Systems (1996), a developer of network performance and service assurance software; NewNet (1997), a developer of SS7-based enhanced services software; Saville Systems (1999), a developer of convergent billing and customer care software; and Centigram cen·ti·gram n. A metric unit of mass equal to one hundredth (10-2) of a gram. centigram one-hundredth of a gram; abbreviated cg. Communications (2000), a leading global provider of Internet-enabled call management, next-generation messaging and unified communications The real time redirection of a voice, text or e-mail message to the device closest to the intended recipient at any given time. For example, voice calls to desk phones could be routed to the user's cellphone when required. services to mobile and landline CSPs. About ADC ADC is The Broadband Company(TM). ADC's fiber optics, network equipment, software and integration services make broadband communications a reality worldwide by enabling communications service providers to deliver high-speed Internet See broadband. , data, video and voice services to consumers and businesses. ADC (Nasdaq:ADCT) has annual sales of over $3.2 billion and employs approximately 21,000 people worldwide. ADC's stock is included in the Standard & Poor's 500 Index and the Nasdaq-100 Index. Learn more about ADC at www.adc.com. About CommTech Founded in 1990, CommTech provides communications service providers world-class, end-to-end service order management, flow-through provisioning, and activation focused on broadband, xDSL, cable, voice, and the converging next generation networks. CommTech's FastFlow(R) Suite manages millions of lines in North America North America, third largest continent (1990 est. pop. 365,000,000), c.9,400,000 sq mi (24,346,000 sq km), the northern of the two continents of the Western Hemisphere. and Europe. CommTech's expertise delivers effective solutions that speed development and marketing of new service offerings; improve time-to-market to generate revenue quickly; enhance customer service; and build brand loyalty. CommTech markets FastFlow solutions via its direct sales force and value-added channel partners. CSPs can obtain FastFlow solutions via traditional purchase or via its FastFlow ASP(TM) offering. CommTech has more than 280 employees in its Cranbury, NJ (USA) headquarters and regional offices throughout North America and Europe. Learn more about CommTech at www.comm.com. Cautionary Statement Under the Private Securities Litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. Reform Act of 1995 Any forward-looking statements contained herein reflect management's current expectations or beliefs and are made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. ADC cautions readers that future actual results could differ materially from those in forward-looking statements depending on the outcome of certain factors. As with any acquisition, we may have difficulty integrating CommTech's products, services, technologies and personnel into our operations. These difficulties could disrupt our ongoing business, distract our management and workforce, increase our expenses and adversely affect our operating results. In addition, all forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, the demand for ADC's products or services, availability of materials and skilled personnel to design and make products, changing market conditions either within ADC's industry or generally within the economy, new competition and technologies, increased costs associated with protecting intellectual property rights, fluctuations in ADC's operating results, pressures on the pricing of the products or services ADC offers, and other risks and uncertainties, including those identified in Exhibit 99-a to ADC Telecommunications ADC Telecommunications (NASDAQ: ADCT) is a communications company located in Eden Prairie, Minnesota, a southwest suburb of Minneapolis. History In 1935, Ralph Allison founded ADC Telecommunications in the basement of his south Minneapolis home, inventing ADC's very Inc.'s Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended October 31, 2000. All trademarks or registered trademarks are the property of their respective company. |
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