Conexant and GlobespanVirata Announce Plan to Merge; Combination Will Create the Worldwide Leader in Semiconductor Solutions for the Broadband Digital Home.Business Editors/High-Tech Writers NEWPORT BEACH Newport Beach, residential and resort city (1990 pop. 66,643), Orange co., S Calif., on Newport Bay and the Pacific Ocean; inc. 1906. It is a popular seaside resort and yachting center. Manufactures include electrical and medical equipment, computers, boats, and adhesives. , Calif. & RED BANK, N.J.--(BUSINESS WIRE)--Nov. 3, 2003 Conexant Systems, Inc. (Nasdaq:CNXT) and GlobespanVirata, Inc. (Nasdaq: GSPN GSPN Generalized Stochastic Petri Net ) today announced the signing of a definitive agreement to combine the two companies in a strategic merger. The combined company will possess the world's most complete and most advanced portfolio of semiconductor solutions targeting the broadband digital home. "Conexant has been focused exclusively on delivering the technology and products that are driving the digital home, one of the semiconductor industry's most exciting and highest-growth opportunities," said Dwight W. Decker, Conexant chairman and chief executive officer. "With the addition of GlobespanVirata's highly complementary product portfolio, we gain key end-to-end digital subscriber line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and connectivity with a leading position in central office applications worldwide. We also benefit by adding GlobespanVirata's leadership position in wireless local area networking, a critical technology for the digital home. "From a financial perspective, we have the opportunity to capture significant operating efficiencies, and we anticipate that the merger will be accretive within six to nine months from the close of the transaction," Decker continued. "Together, we will have the scale and scope to make the necessary R&D investments for continued innovation leadership in wired and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. and multimedia applications for the digital home." "Combining GlobespanVirata with Conexant allows us to complement our leadership in broadband communications capabilities with leadership in broadband media processing See media control. capabilities, including broadcast video encoders and decoders as well as digital set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. system solutions for cable, satellite, terrestrial data and digital video networks," said Armando Geday, president and chief executive officer of GlobespanVirata. "I am confident that the new merged company will deliver stronger financial performance and create more value for our shareholders, customers and employees than either company could operating independently." "This merger will result in the creation of a new company with the management expertise, talent resources, technology, market positions, and critical mass to succeed in an increasingly competitive industry," said Matt Rhodes, Conexant's president. About the Combined Company Armando Geday will serve as chief executive officer of the company and Matt Rhodes will be president. Dwight Decker will assume the role of chairman. The board of directors of the combined company will have 12 members, with Conexant designating seven directors, including Decker, and GlobespanVirata designating Geday and four others. Based on the market values of the individual companies on October 31, 2003, the merged company would be valued at approximately $2.8 billion, and it would have an annual revenue run-rate of approximately $1.2 billion. The combined company will retain the Conexant name and its stock will continue to trade on the Nasdaq national market under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "CNXT." The merged company will employ approximately 2,400 people worldwide and will be headquartered in Red Bank, New Jersey at GlobespanVirata's current headquarters. About the Transaction Under the terms of the merger agreement, which has been unanimously approved by the boards of directors of both companies, GlobespanVirata shareholders will receive 1.198 shares of Conexant common stock for each share of GlobespanVirata stock. Based on the fully diluted share counts for the two companies as of market close on Friday, October 31, 2003, current Conexant shareholders will own 62.75 percent and current GlobespanVirata shareholders will own 37.25 percent of the combined company's shares. The transaction is subject to customary closing conditions, including shareholder and regulatory approvals, and is expected to be completed in the first quarter of calendar 2004. About the Digital Home With always-on broadband connections See broadband and wireless broadband. , the Internet becomes an integral part of everyday life, and the semiconductor products and technology that make the broadband digital home possible allow people to access, share and display information and entertainment on a variety of consumer electronics devices in a seamless fashion. At the heart of today's digital home is a network that provides users with broadband Internet access Broadband Internet access, often shortened to just "broadband", is high speed Internet access—typically contrasted with dial-up access over modem. Dial-up modems are generally only capable of a maximum bitrate of 56 kbit/s (kilobits per second) and require the full use of a and links devices such as personal computers, printers and game consoles See video game console. cohesively and transparently, using both wired and wireless technologies. In the near future, information and entertainment networks will connect additional products including personal digital assistants, digital cameras, MP3 players A digital music player that supports the MP3 format, which was the audio format that started a revolution in online music downloads and distribution. All portable music players, the iPod being the most popular, support MP3 along with one or more other audio formats. , and other handheld appliances. With the commercialization of new technologies that enable the distribution of high-quality digital video and audio content, broadband digital home networks will expand to include stereos, set-top boxes, televisions, and home security and automation systems. Note to Editors, Analysts and Investors The Conexant and GlobespanVirata merger conference call will take place on Monday, November 3, 2003, at 8:30 a.m. EST EST electroshock therapy. EST abbr. electroshock therapy . To listen to the conference call via telephone, please call 866-710-0179 (domestic) or 334-323-9854 (international); security code: Conexant. To listen via the Internet, please visit the investor relations Investor relations The process by which the corporation communicates with its investors. section of Conexant's Web site at www.conexant.com/ir. Playback of the conference call will be available 30 minutes after the conclusion of the call on Conexant's Web site at www.conexant.com/ir or by calling 800-858-5309 (domestic) or 334-323-7226 (international); access code: 40983, pass code: 46324. Callers will need both the access code and pass code to listen to the replay. About Conexant Conexant's innovative semiconductor system solutions are driving digital home information and entertainment networks worldwide. The company has leveraged its expertise and leadership position in modem technologies to enable more Internet connections than all of its competitors combined, and continues to develop leading integrated silicon solutions for cable, satellite, terrestrial data and digital video networks. Key products include digital subscriber line (DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary ) and cable modem cable modem Modem used to convert analog data signals to digital form and vise versa, for transmission or receipt over cable television lines, especially for connecting to the Internet. solutions, home network processors, broadcast video encoders and decoders, digital set-top box components and systems solutions, and dial-up modems. The company also offers a suite of wireless data and networking components solutions that includes HomePlug(R), HomePNA(TM) and WLAN See wireless LAN. WLAN - wireless local area network (802.11) components and reference designs. Conexant is a fabless semiconductor company A fabless semiconductor company specializes in the design and sale of hardware devices implemented on semiconductor chips. It achieves an advantage by outsourcing the fabrication of the devices to a specialized semiconductor manufacturer called a semiconductor foundry or "fab. and has approximately 1,400 employees. The company is headquartered in Newport Beach, Calif. To learn more, visit Conexant at www.conexant.com. About GlobespanVirata GlobespanVirata is a leading provider of broadband communications solutions for consumer, enterprise, personal computer and service provider markets. GlobespanVirata delivers complete system-level high-speed, cost-effective and flexible DSL and wireless networking See wireless network. chip sets, software and reference designs to leading global manufacturers of broadband access See broadband and wireless broadband. and wireless networking equipment. The company's products include broadband system-level solutions for modems, routers, residential gateways, and DSLAMs, as well as a wide variety of wireless networking chip sets and reference designs that are enabling a new generation of wireless connectivity in notebooks, PDAs, digital cameras, MP3 players and other handheld networking appliances. GlobespanVirata applies the industry's longest history in DSL and wireless networking development and deployment to offer unparalleled support to its more than 400 customers in bringing its proven broadband and wireless networking solutions to market. GlobespanVirata is headquartered at 100 Schulz Drive, Red Bank, New Jersey 07701 and can be reached at +1-732-345-7500. 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. Statement This press release contains statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc future results of Conexant and GlobespanVirata (including certain projections and business trends) that are "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " as defined in 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. Actual results may differ materially from those projected as a result of certain risks and uncertainties. For each of Conexant and GlobespanVirata, these risks and uncertainties include, but are not limited to: the cyclical nature of the semiconductor industry and the markets addressed by the company's and its customers' products; demand for and market acceptance of new and existing products; successful development of new products; the timing of new product introductions; the availability of manufacturing capacity; pricing pressures and other competitive factors; changes in product mix; product obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. ; the ability to develop and implement new technologies and to obtain protection for the related intellectual property; the uncertainties of 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. ; and, in the case of GlobespanVirata, the integration of its Wireless Networking Products Group, as well as other risks and uncertainties, including those detailed from time to time in Conexant's and GlobespanVirata's Securities and Exchange Commission filings. Such risks also include costs related to the proposed merger; failure to obtain the required approvals of Conexant and GlobespanVirata stockholders; risks that the closing of the transaction is substantially delayed or that the transaction does not close; and the risk that Conexant's and GlobespanVirata's businesses will not be integrated successfully. These forward-looking statements are made only as of the date hereof, and Conexant and GlobespanVirata undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise. Additional Information Conexant and GlobespanVirata intend to file with the Securities and Exchange Commission (the "SEC") a registration statement on Form S-4 that will include a joint proxy statement/prospectus and other relevant documents in connection with the proposed transaction. Conexant and GlobespanVirata will mail the joint proxy statement/prospectus to their respective investors and securityholders. Investors and securityholders of Conexant and GlobespanVirata are urged to read the joint proxy statement/prospectus and other relevant materials when they become available because they will contain other information about Conexant, GlobespanVirata and the proposed transaction. Investors and securityholders may obtain a free copy of these materials (when they are available) and other documents filed with the SEC at the SEC's website at www.sec.gov. A free copy of the joint proxy statement/prospectus when it becomes available may also be obtained by contacting Conexant Investor Relations at 4000 MacArthur Boulevard, Newport Beach, California Newport Harbor redirects here. For the MTV reality series, see . Newport Beach, incorporated in 1906, is a city in Orange County, California, 10 miles south of downtown Santa Ana. 92660 and through Conexant's website at www.conexant.com, or by contacting GlobespanVirata at 100 Schulz Drive, Red Bank, New Jersey 07701 and through GlobespanVirata's website at www.globespanvirata.com. Conexant, GlobespanVirata and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from their respective stockholders with respect to the proposed transaction. Information about the directors and executive officers of Conexant and their ownership of Conexant shares is set forth in the proxy statement Proxy Statement A document containing the information that a company is required by the SEC to provide to shareholders so they can make informed decisions about matters that will be brought up at an annual stockholder meeting. for Conexant's 2003 Annual Meeting of Shareowners. A free copy of this document may be obtained by contacting the SEC or Conexant as indicated above. Information about the directors and executive officers of GlobespanVirata and their ownership of GlobespanVirata stock is set forth in the proxy statement for GlobespanVirata's 2003 Annual Meeting of Stockholders. A free copy of this document may be obtained by contacting the SEC or GlobespanVirata as indicated above. Investors and securityholders may obtain additional information regarding the interests of such directors and executive officers in the proposed transaction by reading the joint proxy statement/prospectus when it becomes available. Conexant is a trademark of Conexant Systems, Inc. HomePlug is a registered trademark of the HomePlug Powerline Alliance HomePlug is an industry trade group for power line communication. This organization of about 50 companies defines power line communication specifications. HomePlug 1.0 and AV are the two versions of the specification for home networking technology that connects devices to each , Inc. and HomePNA is a trademark of the Home Phoneline Networking Alliance (communications, networking, protocol, standard) Home Phoneline Networking Alliance - (HomePNA) A non-profit association of more than 100 technology companies working together to ensure adoption of a phone line networking standard which should provide high-speed, affordable home . PRISM is a registered trademark and the GlobespanVirata name and logo are trademarks of GlobespanVirata, Inc. Other brands and names contained in this release are the property of their respective owners. |
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