BBN Corporation to divest majority interest in BBN Domain subsidiary.CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 2, 1996--BBN Corporation (NYSE NYSE See: New York Stock Exchange : BBN (BBN Technologies, Cambridge, MA, www.bbn.com) A consulting firm that participated in the development of some of the most extensive networks in the world, including ARPANET, which evolved into the Internet. It was founded in 1948 as a consulting service in acoustics by Dr. ) today announced an agreement with an investment group led by ABS Capital Partners under which ABS will purchase a majority interest in BBN Domain Corporation, a BBN subsidiary that provides process optimization Process optimization is the practice of making changes or adjustments to a process, to get results. Optimization is the use of specific techniques to determine the most cost effective and efficient solution to a problem or design for a process. software to manufacturing and pharmaceutical companies. The divestiture reinforces BBN's commitment to focus its resources on the expanding opportunity for providing Internet services to businesses and organizations. Upon closing, ABS will invest $36 million in preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. of Domain, and Domain will redeem a significant portion of BBN's interest in Domain for a cash payment of $36 million, in connection with the recapitalization of Domain. BBN will retain a minority interest of approximately 15% of the voting stock Voting stock The shares in a corporation that entitle the shareholder to vote. voting stock Stock for which the holder has the right to vote in the election of directors, in the appointment of auditors, or in other matters brought up at the of Domain. The sale is subject to certain closing conditions, and is expected to close within 30 days. For BBN, the divestiture is another significant step in the company's strategy to focus principally on Internet solutions to businesses and organizations. The proceeds from this divestiture and the proceeds from the recently announced private placement combined with the company's existing cash balances are expected to provide more than $150 million in cash and short-term investments. This high level of liquidity will enable BBN to continue to invest aggressively in the expansion of the company's network infrastructure, the expansion of distribution channels, and the development of value-added services as well as to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. partnerships with AT&T, America Online See AOL. and Andersen Consulting. Following the closing of the transaction, Domain will become an independent software company providing customers with software solutions that help them optimize their processes so they can deliver high-quality products to market faster. Domain's headquarters will remain in Cambridge, Massachusetts. For the nine months ended March 31, 1996, Domain had revenues of $30.1 million. BBN Chairman and 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. George H. Conrades said, "This transaction benefits both BBN and Domain. It underscores our commitment to further concentrate all of BBN's attention and energy on our rapidly growing position as the leading independent Internet solutions provider to businesses and organizations, while also improving our balance sheet." ABS Capital Partners, based in Baltimore, is a private equity fund with approximately $450 million under management. BBN Corporation is one of the nation's leading providers of Internet services and internetworking solutions to businesses and organizations. For the nine months ended March 31, 1996, BBN had revenues of $196 million. For more information, visit BBN's web site at http://www.bbn.com. CONTACT: Peter W. Thonis BBN Corporation (617) 873-3512 pthonis@bbn.com |
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