DSET and ISPsoft Agree to Merge to Offer IP Provisioning Services; Technology Leaders Merge to Capture Major Share of $1.6 Billion Market.Business/Technology Editors BRIDGEWATER & SHREWSBURY, N.J.--(BUSINESS WIRE)--June 26, 2001 DSET DSET Desert Sunshine Exposure Testing Inc. Corporation (Nasdaq: DSET) today announced that it has signed a definitive agreement to merge with ISPsoft Inc., a technology leader in software solutions that provision Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (IP)-based services for enterprise and service provider networks. Located in Shrewsbury, NJ, ISPsoft's "single-click" software technology simplifies the delivery of broadband services See broadband and broadband service provider. by automating the complex labor-intensive processes of provisioning new services across multi-vendor networks. Founded in 1999 by former Bell Laboratories engineers, ISPsoft was funded by the New Ventures Group of Lucent Technologies and Signal Lake Ventures in April 2000. At present, ISPsoft has 33 employees. The market for next generation software-based provisioning systems is expected to grow from approximately $800 million in 2001 to almost $1.6 billion in 2004, 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. a report by the research and consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a IDC. This market sizing does not include the broader market for service level assurance (network management-based solutions), which the new company (DSET and ISPsoft) expects to enter based on its distribution and development rights to carrier-class network management applications. Version 2.0 of ISPsoft's flagship product A primary product of a company, which is typically why the company was founded and/or what made it well known. For example, MS-DOS, Windows and the Microsoft Office suite have been flagship products of Microsoft. CorelDRAW is a flagship product of Corel Corporation. will begin shipping in early July and will enable the creation of IP-based virtual private networks (VPNs) that support IP security (IPsec) and quality of service (QoS) on a multi-vendor basis. The VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. product segment is one that a recent Bear Stearns The Bear Stearns Companies, Inc. (NYSE: BSC) is the parent company of Bear, Stearns & Co. Inc., one of the largest global investment banks and securities trading and brokerage firms in the world. report indicates is the "killer application Killer Application Killer application or "killer app" is a buzzword that describes a software application that surpasses all of its competitors. Notes: The term is sometimes used to describe a type of software. " for next generation networks. Many competitors are heading for this space, including Orchestream, a publicly traded company publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. , and a host of private companies, including Emperative, Syndesis and Goldwire. Since both companies are using Weblogic(TM) from BEA Systems BEA Systems, Inc. (NASDAQ: BEAS) is one of the major companies developing enterprise infrastructure software. BEA makes middleware, products that help software run on top of databases. , Inc. as their underlying Java-based platform, the potential for integration exists between the IP provisioning and 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. interconnection product families. This combination also has the potential to strengthen the companies' current relationships with OSS suppliers and open the door to new partnerships. The goal of the merged companies is to become the global leader in IP service provisioning, service level assurance and B2B (Business to Business) Refers to one business communicating with or selling to another. See B2B e-commerce, B2C and B2G. B2B - business to business interconnection systems for service providers and major enterprises on a global basis. Dr. Binay Sugla, president and chief executive officer of ISPsoft stated, "By bringing together the unique IP service provisioning and network management products of ISPsoft and DSET's proven engineering, sales, marketing and professional services (job) professional services - A department of a supplier providing consultancy and programming manpower for the supplier's products. , the combined company has the opportunity to become a major force in next generation OSS solutions." William P. McHale, Jr., DSET's chairman, president and chief executive officer, stated, "We are excited about the opportunity to offer new software products and services to a new set of targeted customers not constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by regulatory issues or geographical boundaries. Teaming with ISPsoft, we will be able to address market opportunities on a global basis for service providers and enterprises that want to deliver broadband services to their respective customers or employees. "We believe this moves us well beyond our current set of revenue-generating offerings to a broader set of targeted industries and, in turn, should give our investors the best chance to see a return on their investment in DSET stock." DSET will continue to sell gateway products and services for the OSS interconnection business and will also start to sell ISPsoft's IP provisioning solutions immediately under the terms of a reseller agreement signed on June 26, 2001. The company expects that its initial revenue from ISPsoft products could start as early as Q4 2001. As previously announced, DSET has been moving to a multi-year "pay as you grow" strategy to provide alternatives to competitive service providers that are constrained by a lack of funding, but who have hopes for building their business over the next few years. This new pricing option should help to build recurring re·cur intr.v. re·curred, re·cur·ring, re·curs 1. To happen, come up, or show up again or repeatedly. 2. To return to one's attention or memory. 3. To return in thought or discourse. revenue streams for DSET as compared to the company's previous one-time license fee option. The new pricing option will also be offered for the IP provisioning solutions. According to Mr. McHale, "We believe that if we can build recurring revenue streams and establish better visibility to quarterly earnings, we will enhance the value of the new company." DSET also indicated that it would reduce the size of its current organization to approximately 100 people (all assigned to the gateway business) in the near term, as compared to the current staffing level of 170. This is due to the weakness in the OSS interconnection business and the move to the pay as you grow pricing model that generates cash over multi-year contracts as compared to the one-time license fee option. DSET expects that its second-quarter financial results will include a restructuring charge restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. of between $1.0 million and $1.2 million for this activity. In conjunction with these changes, DSET has decided to discontinue certain gateway products and therefore expects to record an asset impairment charge of between $5.0 million and $6.0 million related to goodwill, acquired technologies and surplus fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → in the second quarter of 2001. DSET management believes that the cost reduction actions mentioned above, tied exclusively to the gateway business, should reduce costs by more than $10 million annually. Mr. McHale will continue as chairman of the DSET Board of Directors and chief executive officer, while Dr. Sugla will assume the position of president and drive the strategic direction and business development of the combined company. Under the terms of the merger, which is subject to shareholder approval by both parties and other conditions, ISPsoft equity shareholders will own approximately 45% of the new company. In addition to the shares of common stock, DSET will pay $1.0 million in cash, assume $1.3 million in debt, and provide interim funding of $2.0 million. DSET will also pay an additional $1.0 million in stock or cash in 2002 if certain revenue targets are achieved. The companies expect the deal to close by the end of September 2001. "Signal Lake believes that this merger is excellent for investors for the following reasons: the combined company is targeted towards a large and rapidly growing market for next generation OSS services; second, the joint assets and capabilities arising from this merger will establish rapid leadership; and finally, the management talent will be capable of sustaining and growing the merged company," said Bart Stuck, managing director, Signal Lake, whose previous startup investments have included companies such as Ciena. Caution Required by SEC Rules Investors and security holders are urged to read DSET's proxy statement/prospectus regarding the proposed combination when it becomes available because it will contain important information about the transaction. The proxy statement/prospectus will be filed with the SEC by DSET. Investors and security holders may obtain a free copy of the proxy statement/prospectus (when it is available) and other documents filed by DSET with the SEC at the SEC's Web site at www.sec.gov. The proxy statement/prospectus and these other documents may also be obtained for free from DSET. DSET and its executive officers and directors may be deemed to be participants in the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of proxies from stockholders of DSET with respect to the transactions contemplated by the merger agreement. Information regarding such officers and directors is included in DSET's 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. of its 2001 annual meeting of stockholders dated May 17, 2001. This document is available free of charge at the SEC's Web site at www.sec.gov and from DSET. Conference Call on June 27, 2001 A conference call will be held at 2:30 PM Eastern Time on June 27 during which the merger will be discussed by Dr. Binay Sugla, president and chief executive officer of ISPsoft; William P. McHale, Jr., DSET's chairman, president and chief executive officer; and Bruce M. Crowell, vice president and chief financial officer of DSET. Investors can listen to a live Webcast of the conference call at www.StreetFusion.com. The DSET Web site, www.dset.com, will also have a direct link to the conference-call broadcast at this site. Listeners should go to the Web site at least 15 minutes prior to the call to download and install any necessary audio software. For those who cannot listen to the live Webcast, the teleconference will be archived on both the DSET and StreetFusion sites for 30 days. In addition, you may also listen to the playback of the call after 6:00 PM by dialing 1-800-475-6701, access code 593470 through July 4, 2001. About ISPsoft ISPsoft, Inc. is a leading provider of broadband provisioning and management solutions to carriers and enterprises for increased flexibility, reliability and scalability of services. The company's end-to-end provisioning solutions bridge the gap between server-based provisioning and network element-based provisioning. ISPsoft's carrier class flagship product, Universal Provisioning Exchange (UPX UPX Ultimate Packer for eXecutables UPX Ulead Photo Express ) software platform can rapidly deploy secure, policy-based services for gold-silver-bronze multi-tiered classes of service and increase profitability. The company recently released VPN solutions that enable private networks over IP networks - with guaranteed Quality of Service. For more information visit the company at www.ispsoft.com. About DSET DSET is a leading supplier of software known as electronic-bonding gateways that enable competitive service providers in the telecommunications industry to implement an automated Trading Partner Network (TPN TPN, in biochemistry, abbreviation for triphosphopyridine nucleotide, a coenzyme now usually called nicotinamide adenine dinucleotide phosphate, or NADP. ). A TPN plays a critical role in lowering the cost of acquiring customers, reducing the amount of time required to turn on services for new customers, and minimizing the time required to resolve service outages to ensure higher customer satisfaction and less customer turnover. DSET provides the installation, training, interoperability testing, and maintenance services needed to put TPNs into production and maintain efficient operation. DSET is headquartered in Bridgewater, New Jersey, and the company's Web site can be viewed at www.dset.com. Statements regarding financial matters contained in this press release, other than historical facts, are forward-looking. Since all statements about DSET's plans, estimates, and expectations are based on current projections that involve risks and uncertainties, and are subject to change at any time, the company's actual results may differ materially from expected results. Investors should consider these risks and uncertainties, which are discussed in documents filed by DSET with the Securities and Exchange Commission. These documents identify important factors that could cause the actual results to differ materially from those contained in the projections or 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. . DSET expressly disclaims any obligation to update any forward-looking statements. DSET and the DSET logo are registered trademarks of DSET Corporation. BEA BEA - Basic programming Environment for interactive-graphical Applications, from Siemens-Nixdorf. and WebLogic are registered trademarks of BEA Systems, Inc. Java is a trademark of Sun Microsystems Sun Microsystems, Inc. (NASDAQ: JAVA[3]) is an American vendor of computers, computer components, computer software, and information-technology services, founded on 24 February 1982. , Inc. in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and other countries. All other trademarks are the property of their respective owners. |
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