Comverse Technology, Inc. Signs Agreement To Acquire Gaya Software Industries Ltd.

Business/Technology Editors

WOODBURY, N.Y.--(BUSINESS WIRE)--June 30, 2000

IP Telephony Software Developer Brings Intelligent IP Gateway

Technology To Comverse

Comverse Technology, Inc. (NASDAQ:CMVT), the world's leading supplier of software and systems enabling network-based enhanced services, announced today that it has signed a definitive agreement to acquire Gaya Software Industries Ltd., a privately-held, Lod, Israel-based firm, founded by Yoram Regev, Ofer Corenfeld, and Yotam Raz, specializing in software-based intelligent IP gateways and voice-over-IP (VoIP) technology.

Comverse Technology's acquisition of Gaya is expected to be effectuated as a stock-for-stock transaction, which will be accounted for as a pooling-of-interests. Comverse will issue new shares representing approximately $25.1 million to Gaya shareholders, and will assume Gaya's outstanding options and warrants. One-time charges for acquisition-related costs are expected not to exceed $1 million. Excluding the one-time charge, the company expects the acquisition to be neutral to earnings per share over the near-term.

Gaya offers a range of advanced telecommunications software building blocks, with particular emphasis on VoIP technology. This includes intelligent IP gateway technology developed for Comverse affiliate star*home, which is presently deploying a global IP "network-of-networks" to allow wireless international travelers to enjoy the Virtual Home Environment (VHE), which includes ubiquitous access to home-based enhanced services, in the users' familiar languages and user interfaces.

Kobi Alexander, Chairman, President and CEO of Comverse, stated, "Gaya's work with our star*home affiliate has been very impressive, in terms of innovation and quality. As we see more and more demand for star*home and other IP-based services developed by other Comverse companies, Gaya's technology, expertise, and talented management and employees will help us to respond with the strongest solutions, in the shortest timeframe."

Yotam Raz, CEO of Gaya, said, "Comverse has a reputation for excellent technology and product performance, and has proven itself to be one of the most elite, best managed high technology companies in the world. Comverse's more than 330 network operator customers are constantly seeking new solutions from Comverse, to help them succeed in an increasingly competitive telecommunications environment. We are pleased to become part of such a fine organization, and look forward to helping Comverse continue to expand on its position as the leading technology supplier enabling enhanced communications services."

Gaya will continue to operate from its existing facilities. Yotam Raz will continue to head-up its operations together with the other founders.

About Gaya

Gaya Software Industries, founded in 1995, is a software developer specializing in telecommunications applications, with particular emphasis on voice-over-IP technology. Gaya designs, develops and markets the Themis service node products for IP-based telecommunications applications, incorporating telephony, interactive voice response, speech recognition, voice-over-IP, Internet and wireless technologies. Visit the company's Web site at http://www.gaya.com.

About Comverse

Comverse Technology, Inc., headquartered in Woodbury, New York, designs, develops, manufactures and markets computer and telecommunications systems and software for communications and information processing applications. Comverse's Network Systems Division's products include: multimedia enhanced services systems and software, which are currently used by more than 330 wireless and wireline telecommunications network operators to provide revenue-generating services such as call answering, wireless data and Internet-based information services, prepaid wireless services, mailbox-to-mailbox messaging, Internet-based unified messaging (voice, fax, and email in a single mailbox), interactive voice response, virtual phone/fax, one-touch call return, personal number service, call screening/caller introduction, voice-controlled web portal and other speech recognition-based services, Internet messaging, Internet call waiting, and other personal communication services. Comverse's Infosys Division's products include: multiple channel, multimedia digital monitoring systems marketed to law enforcement and intelligence agencies; and multiple channel, multimedia digital recording, logging, and quality monitoring systems marketed to call centers, financial institutions and other organizations. Comverse's Ulticom Division's products include: network signaling software. Comverse Technology is an S&P 500 and NASDAQ-100 Index company. Visit Comverse Technology's web site at http://www.comverse.com.

Statements in this release concerning Comverse's or Gaya's future prospects are "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. There can be no assurances that future results will be achieved, and actual results could differ materially from forecasts and estimates. Important factors that could cause actual results to differ materially include the risks associated with the sale of large, complex, high capacity systems and with new product introductions as well as the uncertainty of customer acceptance of these new or enhanced products from either Comverse, Gaya or their competition; risks associated with rapidly changing technology and the ability of Comverse and/or Gaya to introduce new products on a timely and cost-effective basis; risks associated with changes in the competitive or regulatory environment in which Comverse and/or Gaya operate; risks associated with significant foreign operations and international sales, including fluctuations in foreign currency exchange rates and interest rates; the volatility of the international marketplace; risks associated with Comverse's and/or Gaya's ability to retain existing personnel and recruit and retain qualified personnel; and other risks described in filings with the Securities and Exchange Commission. These risks and uncertainties, as well as others, are discussed in greater detail in the filings of Comverse with the Securities and Exchange Commission, including their most recent Annual Reports on Form 10-K and their subsequent Quarterly Reports on Form 10-Q. Each company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made.