Cisco to Acquire Telebit's MICA Technologies via Cash Merger: Accelerates Dial Market Offerings Through Digital Modem Personnel and Technology.SAN JOSE, Calif.--(BUSINESS WIRE)--July 22, 1996--Cisco Systems, Inc. today announced it has signed a definitive agreement to acquire Telebit Corp. and its Modem ISDN ISDN in full Integrated Services Digital Network Digital telecommunications network that operates over standard copper telephone wires or other media. Channel Aggregation (MICA(tm)) technologies for approximately $200 million. Approximately 50 MICA development, product management and customer-support personnel will become the Dial Technology Division within Cisco's Access Business Unit and will be located in Cisco's Chelmsford, Mass., facilities. The division will help Cisco integrate the advanced features of MICA's high-density digital modem technology currently under development into current and future Cisco products, including the Cisco 2509-2511 access servers and the AS5200 Universal Access Server. For customers seeking scalable dial solutions, MICA technology combined with Cisco IOS(tm) software and wide-area network switching is expected to provide a scalable, secure network connection using managed modem technology. Cisco IOS software supports the multimedia requirements of both 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 protocols, optimizing WAN services for controlling intranetwork access. By providing higher dial densities, product flexibility, faster time-to-market and investment protection for both new and existing customers, MICA technology enables the simultaneous support of remote access users through both analog modems and ISDN devices. Digital modem technology offers "any-to-any" multisession A compact disc capability in which data are recorded in more than one session. Each subsequent recording session can be linked to the previous so that they all appear as one. Each session adds overhead on the disc, because lead-in and lead-out sectors must be recorded each time, which functionality for all v.34bis and lower speed data modem standards while supplying value-added functions for ISDN channels, including compression, rate adaptation and framing assist for such protocols as PPP (Point-to-Point Protocol) The most popular method for transporting IP packets over a serial link between the user and the ISP. Developed in 1994 by the IETF and superseding the SLIP protocol, PPP establishes the session between the user's computer and the ISP using , SLIP or HDLC (High-level Data Link Control) A data link protocol from ISO for point-to-point communications over serial links. Derived from IBM's SDLC protocol, HDLC has been the basis for numerous protocols including X.25, ISDN, T1, SS7, GSM, CDPD, PPP and others. . Under the terms of the agreement, Telebit will sell its analog modem business, NetBlazer and MicaBlazer products and other assets and liabilities to a new entity formed via a Telebit management buyout, for a $31.5 million promissory note and $3.5 million in redeemable preferred stock. Simultaneously, under the definitive agreement, Cisco will purchase the remaining Telebit Corp., which will consist of Telebit patents, MICA intellectual property and MICA personnel, and will assume the $35 million financing for the management buyout. Cisco will pay approximately $200 million in cash, net of option proceeds, which will result in Telebit shareholders receiving $13.35 per share. Cisco expects the agreement will result in a one-time charge against after-tax earnings of between 22 and 25 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. in its first fiscal quarter of 1997 as a write-off of in-process research and development. The transaction is expected to be completed by the end of October 1996 and is subject to various conditions, including clearance under the Hart-Scott-Rodino Antitrust Act and approval by Telebit stockholders. The new entity created by the management buyout will assume the name Telebit Corp., and James D. Norrod will be president 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. . The company intends to license Cisco's newly integrated MICA development efforts and incorporate it into various LAN server technologies, including Novell NetWare, Microsoft NT and several UNIX-based server platforms. The current Telebit (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :TBIT See terabit. ), of Chelmsford, Mass., is an innovator in developing remote-access and digital modem technology for computer networks. Telebit's products are used worldwide in commercial applications. The company has offices in the United States, Europe and Asia, and markets its products worldwide through value-added resellers, wholesale distributors and OEMs. Company information is available at World Wide Web site http://www.telebit.com. Cisco Systems (NASDAQ:CSCO CSCO Cisco Systems Incorporated (stock symbol) CSCO Chief Supply Chain Officer ) is the leading global supplier of internetworking solutions for corporate intranets and the global Internet. Cisco's products -- including routers, LAN and WAN switches, dial-up access servers and network management software -- are integrated by Cisco IOS software to link geographically dispersed LANs, WANs and IBM (International Business Machines Corporation, Armonk, NY, www.ibm.com) The world's largest computer company. IBM's product lines include the S/390 mainframes (zSeries), AS/400 midrange business systems (iSeries), RS/6000 workstations and servers (pSeries), Intel-based servers (xSeries) networks. Company news and product/service information are available at World Wide Web site http://www.cisco.com. Cisco is headquartered in San Jose, Calif. -0- Note to Editors: Telebit and NetBlazer are registered trademarks, and MICA, MicaBlazer and Granite are trademarks of Telebit Corporation. Cisco IOS and Cisco Systems are a trademarks, and Cisco and the Cisco Systems logo are registered trademarks of Cisco Systems, Inc. All other trademarks, service marks, registered trademarks or registered service marks mentioned in this document are the property of their respective owners. CONTACT: Cisco Systems, Inc. Adam Stein, 408/526-7388 (Press) astein@cisco.com Mary Thurber, 408/526-8893 (Investors) mthurber@cisco.com or Telebit Corp. Anna Morbelli, 508/656-9497 (Press) amorbell@telebit.com Brian Cohen cohen or kohen (Hebrew: “priest”) Jewish priest descended from Zadok (a descendant of Aaron), priest at the First Temple of Jerusalem. The biblical priesthood was hereditary and male. , 508/656-9300 (Investors) bcohen@telebit.com |
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