EXHIBIT 99.1
[VERILINK(R) LOGO] [LARSCOM LOGO]
Contact:
Bill Smith
Verilink Corporation
Vice President and CFO
256.327.2204
bsmith@verilink.com
Donald W. Morgan
Larscom Incorporated
Vice President and CFO
510.492.0800
morgan@larscom.com
Lissa Bogaty
The Blueshirt Group
914.725.8475
lissa@blueshirtgroup.com
VERILINK AND LARSCOM ANNOUNCE MERGER AGREEMENT
ACQUISITION COMBINES TWO LEADERS IN BROADBAND ACCESS
AND CREATES SIGNIFICANT ECONOMIES OF SCALE
MADISON, ALA. APRIL 29, 2004 Verilink Corporation (Nasdaq: VRLK) and Larscom
Incorporated (Nasdaq: LARS) today jointly announced the execution of a
definitive merger agreement in which Verilink will acquire Larscom. The
all-stock transaction, which has been approved by the boards of directors of
each company, combines two companies with complementary product lines and
customer bases, creating a leading broadband access solutions company.
Under the terms of the definitive agreement, Verilink will acquire Larscom for
approximately 6 million shares of Verilink common stock, with each Larscom share
being converted into 1.166 Verilink shares, subject to certain adjustments.
"This acquisition is another milestone in the execution of our strategy to
become a leading provider of first mile, access solutions that enable our
customers to leverage their existing infrastructure while transitioning to
next-generation architectures," stated Leigh S. Belden, President and Chief
Executive Officer of Verilink. "Larscom brings a complementary customer base and
synergistic products, and the combined companies will possess one of the
industry's broadest portfolios of broadband access products. We believe as a
single company, we can better assist telecom service providers in their offering
of value-added services such as high-speed Ethernet and Voice over IP while
minimizing their total investment. Importantly, by combining the two companies,
we believe we will be able to achieve significant synergies and economies of
scale, enabling us to increase overall profitability."
Larscom, based in Newark, CA, is focused on the edge of the Metro Network and
offers one of the industry's broadest portfolios of WAN access equipment for the
carrier and enterprise markets. These products include optical edge access
multiplexers for both TDM and Ethernet over SONET, integrated access devices
(IADs), inverse multiplexers and CSU/DSUs.
"We are excited about combining with Verilink and believe it will offer our
customers a uniquely broad and state-of-the art product line of access solutions
and services," said Daniel L. Scharre, Chief
Verilink and Larscom Announce Merger Agreement
Page 2
Executive Officer of Larscom. "We are looking forward to building a strong
combined company for the benefit of our customers, stockholders and employees."
Mr. Belden added, "The addition of Larscom's eLink family of T1 Integrated
Access Devices (IADs) increases the breadth of Verilink's portfolio of TDM,
voice over packet, and voice over IP IADs and gives our carrier customers more
choices and options as they roll out their current and next generation
integrated services offerings."
The transaction is subject to the approval of each company's stockholders and
other customary closing conditions. The transaction is currently expected to
close in the summer of 2004. The time, location and other details regarding each
company's stockholder meeting will be communicated to stockholders at a later
date. Significant stockholders of both companies, representing over 50% of
Larscom's and over 15% of Verilink's voting power, have agreed to vote in favor
of the transaction.
Verilink retained Raymond James & Associates, Inc. as its financial advisor and
Powell, Goldstein, Frazer & Murphy LLP as its legal advisor in the transaction.
CONFERENCE CALL INFORMATION
Verilink and Larscom will host a joint conference call scheduled for Monday, May
3, 2004 at 4:00 p.m. CDT. Instructions for accessing the call will be issued in
a separate press release.
ABOUT LARCSOM INCORPORATED
Larscom (Nasdaq: LARS) enables high-speed access by providing cost-effective,
highly reliable (carrier-class), and easy-to-use network access equipment. In
June 2003, Larscom merged with VINA Technologies to create a worldwide leader in
enterprise WAN access for the delivery of high-speed data, and integrated voice
and data services with the deployment of more than 350,000 systems worldwide.
Larscom's customers include major carriers, Internet service providers, Fortune
500 companies, small and medium enterprises, and government agencies worldwide.
Larscom's headquarters are in Newark, California. Additional information can be
found at www.larscom.com.
ABOUT VERILINK CORPORATION
Verilink provides customer premises voice and data access solutions to service
providers, strategic partners and enterprise customers on a worldwide basis.
Verilink is a market leader in voice over packet and voice over TDM IAD
solutions including VoIP, VoDSL and VoATM. Data only offerings include access
routers, probes, CSU/DSUs, DACS and network monitoring solutions. Verilink
turnkey service solutions empower carriers with the flexibility to provide
integrated services regardless of network technology. The Company's headquarters
are located at 127 Jetplex Circle, Madison, AL 35758. Verilink stock trades on
the Nasdaq National Market under the symbol VRLK. To learn more about Verilink,
visit the website at http://www.verilink.com.
ADDITIONAL INFORMATION ABOUT THE MERGER AND WHERE TO FIND IT
Verilink plans to file a Registration Statement on Form S-4 with the Securities
and Exchange Commission ("SEC") in connection with the merger, and Verilink and
Larscom expect to mail a Joint Proxy Statement/Prospectus to stockholders of
Verilink and Larscom concerning the proposed merger transaction. INVESTORS AND
SECURITY HOLDERS OF VERILINK AND LARSCOM ARE URGED TO READ THE REGISTRATION
STATEMENT AND JOINT PROXY STATEMENT/PROSPECTUS AND THE OTHER RELEVANT MATERIALS
CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT VERILINK, LARSCOM, THE MERGER AND RELATED MATTERS. Investors
and security holders will be able to obtain the documents free of charge at the
SEC's web site at www.sec.gov. In addition, investors and security holders may
obtain free copies of the documents filed with the SEC by Verilink by directing
a written request to: Corporate Secretary, Verilink Corporation, 127 Jetplex
Circle, Madison, AL 35758. Investors and security holders may obtain free copies
of the documents filed with the SEC by Larscom by directing a written request
to: Corporate Secretary, Larscom Incorporated,
Verilink and Larscom Announce Merger Agreement
Page 3
39745 Eureka Drive, Newark, CA 94560. Investors and security holders are urged
to read the proxy statement, prospectus and the other relevant materials when
they become available before making any voting or investment decision with
respect to the merger.
In addition to the Registration Statement and Joint Proxy Statement/Prospectus,
Verilink and Larscom file annual, quarterly and special reports, proxy
statements and other information with the SEC. You may read and copy any
reports, statements or other information filed by Verilink and Larscom at the
SEC public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference room. Verilink's and Larscom's filing with the SEC are also available
to the public from commercial document-retrieval services and at the SEC's web
site at www.sec.gov.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Verilink and Larscom will be soliciting proxies from the stockholders of
Verilink and Larscom in connection with the merger and issuance of shares of
Verilink common stock in the merger. In addition, the respective directors and
executive officers of Verilink and Larscom may also be deemed to be participants
in the solicitation of proxies. Information about the directors and executive
officers of Verilink is set forth in the proxy statement for the annual meeting
of stockholders filed on October 10, 2003. Information about the directors and
executive officers of Larscom is set forth in the Larscom Form 10-K/A for the
fiscal year ended December 31, 2003, which was filed with the SEC on April 28,
2004. The directors and executive officers of Verilink and Larscom have
interests in the merger, some of which may differ from, or may be in addition to
those of the respective stockholders of Verilink and Larscom generally. Those
interests will be described in greater detail in the Joint Proxy
Statement/Prospectus with respect to the merger, which may include potential
employment relationships, potential membership on the Verilink Board of
Directors, option and stock holdings and indemnification.
SAFE HARBOR STATEMENT
Except for the historical information contained herein, the matters set forth in
this press release, including statements as to the expected benefits of the
combination of the two companies, future product offerings, expected synergies,
and timing of closing, are forward-looking statements within the meaning of the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties
that may cause actual results to differ materially, including, but not limited
to, the satisfaction of certain conditions to closing of the proposed merger,
including the risk that stockholder approval might not be obtained in a timely
manner or at all, the ability to successfully integrate the two companies and
achieve expected synergies following the merger, the ability of the combined
company to develop and market successfully and in a timely manner new products,
the impact of competitive products and pricing and of alternative technological
advances, and other risks detailed from time to time in the SEC reports of
Verilink, including its Form 10-K for the fiscal year ended June 27, 2003 and
Form 10-Q for the quarter ended January 2, 2004, filed with the SEC on September
24, 2003 and April 22, 2004, respectively, and in the SEC reports of Larscom,
including its Form 10-K for the fiscal year ended December 31, 2003, filed with
the SEC on March 31, 2004. These forward-looking statements speak only as of the
date hereof. Verilink and Larscom disclaim any intention or obligation to update
or revise any forward-looking statements.
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Verilink, the Verilink logo, and NetEngine are registered trademarks of
Verilink Corporation. Larscom is a registered trademark of Larsom
Incorporated. All other trademarks or registered trademarks are the
property of the respective owners.