Exhibit 99.3
Avocent to Acquire OSA Technologies to Extend
Leadership Position in Embedded Management
HUNTSVILLE, Ala., March 29 /PRNewswire-FirstCall/ -- Avocent Corporation
(Nasdaq: AVCT) today announced that it signed a definitive agreement to
acquire OSA Technologies, Inc., a privately-held company located in San Jose,
California with offices in Shanghai, China and Taipei, Taiwan. OSA
Technologies is a leader in embedded manageability firmware and software using
Intelligent Platform Management Interface (IPMI) solutions. The purchase price
is approximately $100 million in cash and stock, plus the assumption of
liabilities and employee stock options. The purchase price consists of
approximately $55 million in cash and Avocent stock valued at approximately
$45 million. The transaction is expected to close during the second quarter.
"Joining with OSA will extend our leadership position in the embedded
management space significantly and provide a strong platform to build sales
through software and firmware enhancements," stated John R. Cooper, president
and chief executive officer of Avocent Corporation. "OSA's leadership in
developing embedded management solutions for the IPMI market complements our
core KVM business and builds upon prior acquisitions.
"OSA's innovative technologies extend current industry standards to enable
true 'lights out' remote management of server room devices. The combination of
OSA's technology and expertise with our current embedded solutions builds on
our strategy of providing a common management interface to enable automation
of the monitoring, configuration and provisioning of server room devices. We
believe the improved reliability, availability and serviceability produced by
these embedded technologies will extend Avocent's growth opportunities beyond
our traditional KVM products.
"OSA's R&D staff complements our existing team focused on embedded
technologies. Their strong position in Asia also furthers our efforts to build
a greater presence in the important Asian market, particularly in China and
Taiwan. Their management team is strong and has excellent relationships with
key industry players. We are excited about combining our resources with OSA to
provide a more integrated solution for embedded products in the server
market," concluded Mr. Cooper.
Commenting on the transaction, Mark Lee, president and CEO of OSA
Technologies, stated, "We are excited to join with Avocent to continue our
leadership in embedded technologies and solutions for servers, as well as fuel
our growth in blade, telecommunication, storage, networking and client device
management. We believe the combination with Avocent is very positive news for
our ecosystem partners and customers as we work closely to resolve TCO
challenges. In addition, we have very complementary sales and distribution
relationships that should broaden our collective markets."
Dell has expressed its commitment to drive standards for systems
management with support for key technologies, such as IPMI, that promote
simplicity and improved cost of ownership for customers and help accelerate
the adoption of common management standards in the industry. In connection
with the acquisition, Dell's decision to use OSA IPMI 2.0 in its next
generation of servers will transfer to Avocent. Dell is also an investor in
OSA.
Based on an anticipated closing date in April 2004, Avocent estimates that
the transaction will reduce reported earnings per share for 2004 by
approximately $0.14 under generally accepted accounting principles (GAAP) and
approximately $0.06 on an operating basis. The estimated GAAP amount is before
a to-be-determined one-time charge for acquired in-process research and
development. The difference of $0.08 between the estimated amounts reported
under GAAP and on an operating basis is due to estimated amortization of
intangible assets and of deferred compensation related to assumed employee
stock options. The transaction is expected to be accretive to Avocent's
earnings within two years based on current projections for sales growth of
embedded devices, firmware and software.
Conference Call Information
Avocent will provide an on-line, real-time Web-cast and rebroadcast of the
conference call discussing the OSA acquisition to be held Monday, March 29,
2004. The live broadcast will be available on-line at www.avocent.com and at
www.firstcallevents.com/service/ajwz402619582gf12.html beginning at 10:00 a.m.
central time. The on-line replay will follow immediately and continue for 30
days.
About OSA Technologies, Inc.
OSA Technologies, Inc. was founded in April 2000. OSA designs,
manufactures and sells firmware and software for the management of server,
blade, telecommunications, networking, storage and client devices. OSA is
headquartered in San Jose, California and has engineering and development
centers in Shanghai, China and Taipei, Taiwan. Additional information is
available at www.osatechnologies.com.
About Avocent Corporation
Avocent Corporation is the leading supplier of connectivity solutions for
enterprise data centers, service providers, and financial institutions
worldwide. Branded products include switching, extension, remote access, and
video display solutions. Additional information is available at:
www.avocent.com.
Forward-Looking Statements
This press release contains statements that are forward-looking statements
as defined within the Private Securities Litigation Reform Act of 1995. These
include statements regarding the closing of the acquisition, the development
and introduction of new products and technologies (including IPMI), the use of
IPMI by OEMs and other customers, the features and benefits of product and
technology integration, the size, growth, and leadership of the potential
markets for these products and technologies in the future, the revenue and
earnings from these new products and technologies in the future, the market
penetration and opportunities for the combined business in Asia and elsewhere,
engineering and design activities, and the results of operations of the
combined business. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ materially from the
statements made, including the risk that the acquisition may not close, risks
associated with the acquisition and subsequent integration of businesses and
technologies, risks associated with general economic conditions, risks
attributable to future product demand, sales, and expenses, risks associated
with reliance on a limited number of customers, component suppliers, and
single source components, risks associated with product design efforts and the
introduction of new products and technologies, and risks associated with
obtaining and protecting intellectual property rights. Other factors that
could cause operating and financial results to differ are described in
Avocent's annual report on Form 10-K filed with the Securities and Exchange
Commission on March 12, 2004. Other risks may be detailed from time to time in
reports to be filed with the SEC. Avocent does not undertake any obligation to
publicly update its forward-looking statements based on events or
circumstances after the date hereof.
Use of Non-GAAP Financial Measures
Operational income and the resulting calculation of earnings per share on
an operating basis as used in this press release are not measures of financial
performance under generally accepted accounting principles (GAAP) and should
not be considered a substitute for or superior to GAAP. Avocent's management
uses operational income as a financial measure to evaluate performance and
allocate resources within the Company. Management believes this measure
presents the Company's results on a more comparable operational basis by
excluding non-cash amortization expenses, non-operational expenses associated
with mergers and acquisitions, and significant and unusual non-recurring gains
and losses on sales of investments made by Avocent. Avocent believes that
operational income is a measure of performance used by some investment banks,
analysts, investors and others to make informed investment decisions. Other
companies may calculate operational income in a different manner so this
measure may not be comparable to similar measures presented by other
companies. The reconciliation of Avocent's results using operational measures
and GAAP is set forth in the text of the press release above.
SOURCE Avocent Corporation
-0- 03/29/2004
/CONTACT: Dusty Pritchett, Senior Vice President of Finance and Chief
Financial Officer of Avocent Corporation, +1-256-217-1300/
/Web site: http://www.avocent.com
http://www.osatechnologies.com
http://www.firstcallevents.com/service/ajwz402619582gf12.html/
(AVCT)
CO: Avocent Corporation; OSA Technologies, Inc.
ST: Alabama
IN: CPR STW
SU: TNM CCA