Exhibit 99.4
Avocent Completes OSA Technologies Acquisition
HUNTSVILLE, Ala., April 7 /PRNewswire-FirstCall/ -- Avocent Corporation
(Nasdaq: AVCT) today announced that it completed the acquisition of 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 acquisition of OSA accelerates our pursuit of embedded management
technologies and provides Avocent with a solid platform to extend our hardware
and software solutions into new markets," stated John R. Cooper, president and
chief executive officer of Avocent Corporation. "OSA is the leader in IPMI
development and we expect this acquisition to enhance our strategy of
providing a common management interface to enable automation of the
monitoring, configuration and provisioning of intelligent devices. We believe
the future for embedded management technologies is excellent, complimenting
our existing KVM products, while providing a totally new market for Avocent to
develop."
OSA was acquired for approximately $100 million in cash and stock, plus
the assumption of liabilities and unvested employee stock options. The
purchase price for the outstanding OSA shares and vested options consisted of
approximately $52 million in cash, which was funded from available cash and
investments, and 1.3 million shares of Avocent stock valued at approximately
$48 million.
In connection with the acquisition, 39 individuals who became non-
executive officer employees of Avocent following the acquisition were awarded
a total of 174,486 employment inducement stock option grants by Avocent. Mark
Lee, who will continue as president and chief executive officer of OSA
Technologies, will join Avocent as a senior vice president, and was awarded
67,290 employment inducement stock option grants. These grants have an
exercise price of $37.42, the closing price as of April 7, 2004, and will vest
over a period of four years under terms that are substantially similar to the
2003 Avocent Corporation Stock Option Plan that was approved by Avocent's
shareholders last year.
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.
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 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 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- 04/07/2004
/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/
(AVCT)
CO: Avocent Corporation; OSA Technologies, Inc.
ST: Alabama, California
IN: PUB CPR FIN TLS
SU: TNM