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A M A T I W E S T E L L
Communications
Corporation
News Release
FOR IMMEDIATE RELEASE
For additional information contact:
Mark L. Meudt Benjamin W. (Tac) Berry Bess Gallanis Brad Wills
Westell, Inc. Amati Communications FRB Wills & Associates
630-375-4125 408-879-2035 Financial Press / Analysts Trade / Business Press
312-640-6737 301-530-3711
Westell Technologies and Amati Communications
Announce Agreement to Merge
xDSL market leaders join forces to provide leading technology and system
solutions for rapidly growing broadband access marketplace
Aurora, IL and San Jose, CA, (October 1, 1997) - Westell Technologies, Inc.
(NASDAQ: WSTL) and Amati Communications Corporation (NASDAQ: AMTX) today
announced the signing of a definitive merger agreement that will create a world-
wide company providing advanced access products and technologies for the
emerging Digital Subscriber Line (DSL) market. The combined company, which
will have an equity market value in excess of $1.2 billion, will offer a wide
range of standards-compliant xDSL solutions based on Discrete Multitone (DMT),
Carrierless Amplitude Phase Modulation (CAP) and other technologies. Amati
will become a wholly owned subsidiary of Westell Technologies, Inc. and will
continue to operate under the Amati name.
Under the terms of the agreement, each share of Amati common stock will be
exchanged for .9 of a share of Class A Westell common stock. Based on the
closing price of Westell shares on September 30, the aggregate value of the
transaction to Amati stockholders would be approximately $394 million.
The merger is a powerful combination of two market leaders that have
directly produced the majority of ADSL lines deployed in the world today. The
merger combines the industry leading supplier of ADSL DMT standards-compliant
products with the leading supplier of ADSL Broadband Access Systems.
Immediate benefits expected from the combined company include: ADSL DMT
standards-compliant solutions available on Westell's ATM-based SuperVision(R)
broadband access platform; xDSL technology migration path to Very High Speed
Digital Subscriber Line (VDSL) in Westell's system architecture; and an end-to-
end systems solution managed by AccessVision(TM), a comprehensive Network
Management solution for network operators. Amati will continue to develop and
deploy its product offerings. The combined company expects to provide leading
network and service operators with the industry's lowest-cost xDSL system and
technology solutions that meet the standards for network level interoperability
Gary Seamans, Chairman and Chief Executive Officer of Westell Technologies
said, "This merger will enable our customers to accelerate their deployment of
high speed data services. Westell now has the resources to serve any and all
customers, with their choice of xDSL technologies at a wide range of performance
capabilities using network level interoperable system platforms that seamlessly
work in frame (Router) or cell (ATM) network architectures."
Jim Steenbergen, President and Chief Executive Officer of Amati
Communications said, "Our two companies share the same vision for developing
technologies to deliver high-speed multimedia services. Separately, each
company has provided leadership in the development of the market for DSL
products and technologies. Together, we can offer a secure migration path from
today's early implementation of DMT products to true standards compliant xDSL
solutions."
Rob Faw, Chief Executive Officer of Westell Inc., a wholly owned subsidiary
of Westell Technologies said, "Westell can offer a complete range of end-to-end
system level solutions that meet our world-wide alliance partner and customer
requirements. We will continue to move aggressively with our current technology
partners and new colleagues at Amati to provide the industry's lowest-cost
interoperable broadband access systems".
The merger, approved by the boards of directors of both companies, requires
the approval of both Amati's and Westell's stockholders and is subject to
regulatory approvals and other customary conditions. Upon completion of the
transaction, Jim Steenbergen will continue as Chief Executive Officer of Amati.
Don Lucas, currently a member of Amati's board of directors, will join Westell
Technologies' Board. The transaction is expected to be accounted for using
purchase accounting and to qualify as a tax-free reorganization.
Westell Technologies expects to take a one-time charge for in-process
research and development and other merger and related expenses upon the closing
of the merger which is expected to occur in the fourth quarter of Westell's
fiscal year 1998. Goldman, Sachs & Co. acted as Westell's financial advisor and
Deutsche Morgan Grenfell Inc. (DMG) acted as financial advisor to Amati.
The combined company will be headquartered in Aurora, Illinois with more
than 900 employees located in Aurora, Illinois, San Jose, California,
Schaumburg, Illinois, Cambridge, England and other locations around the world.
About Westell Technologies, Inc.
Westell Technologies is a holding company for Westell Inc., Conference Plus
Inc. and Westell WorldWide Services Inc.
Westell Inc. is a leading world-wide innovator and manufacturer of
xDSL systems and telecommunications access products, with corporate headquarters
in Aurora, Illinois. Westell's xDSL products are currently in use or trial by
more than 100 customers in over 30 countries world-wide, including Ameritech,
Bell Atlantic, Bell Canada, BT, GTE, MCI, Quebec Telephone, SBC, Saskatchewan
Telephone, Telecom Italia, US West and leading Internet service providers.
In addition to developing and manufacturing xDSL and non-DSL data
and telecommunications products, Westell Inc. has established technology
relationships with leading telecommunication, software, computing and semi-
conductor companies such as Atlantech Technologies, ATML, DSC Communications,
GlobeSpan, Lucent Technologies, Microsoft, Motorola, Nortel and others.
Conference Plus Inc., is a multi-point telecommunications service bureau
specializing in audio teleconferencing, multi-point video conferencing,
broadcast fax, and multimedia teleconference services.
Westell WorldWide Services Inc., a wholly owned subsidiary of Westell
Technologies, provides engineering, installation and network management services
to leading network providers as well as turn-key equipment and service solutions
to enterprise customers and service providers.
Additional information can be obtained by visiting Westell's Web site at
http://www.westell.com.
About Amati
Amati is a pioneer and leading developer of advanced transmission equipment
and technologies for the ADSL, Very High-Speed Digital Subscriber Line (VDSL)
and xDSL markets. Amati is the holder of the ADSL/DMT patents and has licensed
its technology to such companies as Alcatel, Analog Devices Inc., Nortel and
Motorola.
The ADSL/DMT technology, recently selected by BC TEL for a proposed roll
out of commercial ADSL services, is an effective means of transmitting high-
speed data over existing copper phone lines, making Internet access, interactive
services, broadcast quality video and video-on-demand realizable to many
subscribers.
Amati is also participating in tests of ADSL services at speeds from 1.5
Mbps up to 8 Mbps for services ranging from Internet access to video broadcast.
The world-wide trials include services being offered by PTTs in Europe and Asia
Pacific. The Amati international trials underway include broadcast video at 6
Mbps in Australia and data and video applications at 8 Mbps in France. In the
US, Amati is also providing ADSL/DMT equipment in GTE's current Internet access
trials in Washington and Texas. Amati has established technology relationships
with Motorola, NEC, Siemens, Texas Instruments and others. For more information
about Amati Communications, see our Website at http://www.amati.com.
More information about xDSL:
DSL technology, in its various forms (ADSL, SDSL, HDSL, RADSL, and VDSL) is
expected by many to have a dramatic impact on society. DSL provides high-speed
multimedia services such as, super-fast Internet access, video-on demand,
distance learning and video telephony while simultaneously providing traditional
voice services to anyone with a standard, copper telephone line. By placing DSL
modems at both a phone company's central exchange office and at a customer
location, a network or service provider can enable its customers to receive
multimedia content at more than 250 times faster than today's 28.8 Kbps modems.
It is the use of the ubiquitous copper network that has caused DSL to gain
favor as the preferred alternative to other technologies which provide
multimedia services that either bypass, replace, or require additions to, the
existing network copper infrastructure. There are more than 600 million copper
access lines world-wide, potentially making xDSL a multi-billion dollar
industry.
- end -
"Safe Harbor" statement under the Private Securities Litigation Reform
Act of 1995: Certain statements provided in this release constitute
forward looking statements that involve a number of risks and
uncertainties. These risks and uncertainties may cause actual results
to differ materially from expected results and are described in detail
in the Securities and Exchange Commission filings which have been made
by Westell and Amati.
SuperVision is a registered trademark of Westell Technologies, Inc.
AccessVision is a registered trademark of Atlantech Technologies, Ltd.