WESTELL TECHNOLOGIES ANNOUNCES AGREEMENT TO ACQUIRE TELTREND INC.
Acquisition To Create a Leader in Telco Access Products and Fuel Broadband DSL
AURORA, IL ...(DECEMBER 13, 1999)... Robert H. Gaynor, Chairman and Chief
Executive Officer, announced today, that Westell Technologies (NASDAQ: WSTL), a
leading provider of DSL technology, telecommunications access products and
hosted and managed conferencing and support services has signed a definitive
agreement to acquire Teltrend Corporation (NASDAQ: TLTN). Teltrend Corporation
designs, manufactures and markets a broad range of telecommunications and data
communications products used by businesses and telephone companies to provide
voice and data services.
Teltrend, established in 1979, manufactures and markets products to provide data
and voice services over the existing telephone network, primarily in the Local
Loop. Teltrend's unique local telephone loop solutions -developed for HDSL, T1,
Fiber Optic, ISDN, DDS, and DLC applications -- allow telephone companies to
provide new and better services to their customers without the need for costly
infrastructure replacement. Teltrend also manufactures a wide range of products
that convert, change and amplify transmission protocols and are used worldwide
in public and private communications networks.
By merging Teltrend with Westell's HiCap Business Unit, the Company will be a
leader in local loop solutions including T1, Fiber Optic, ISDN, DDS, HDSL and
DLC applications serving virtually the entire carrier market. Westell expects to
realize significant synergies as a result of the transaction, including a
decrease in combined operating expenses, increases in operating leverage, and
expanded strength in its sales channel . The combined Company's headquarters and
manufacturing facility will be based in Aurora, Illinois and will have more than
1,000 employees.
Marc Zionts, Chief Executive Officer of Westell, stated that "Teltrend brings
outstanding products, people and customers to the Westell family. The
combination of Westell and Teltrend will provide enormous benefits. We will fuel
our DSL initiatives while at the same time build a stronger operating base and
increase our scale."
J. Nelson Westell Inc., President and COO, remarked "Both Teltrend and Westell
have been in the business of providing local access solutions to our customers
for many years. We believe we will realize a high degree of synergy in our
companies enabling the combined entity to more effectively serve the market with
an expanded product portfolio. This exciting combination will also allow us to
further broaden our DSL programs."
"Teltrend is very pleased to join the Westell team", stated Howard Kirby,
Chairman and Chief Executive Officer of Teltrend. "Westell's high growth
initiatives, innovation, and presence in the marketplace provide a great fit
with Teltrend. Our shareholders, customers and employees will benefit from an
increased presence in our core business and expansion into the DSL arena."
Under the terms of the agreement, each share of Teltrend common stock will be
exchanged for 3.3 shares of Class A Westell common stock. Based on the closing
price of Westell shares on December 10, the aggregate value of the transaction
to Westell stockholders is $205 million.
The merger, approved by the boards of directors of both companies, will also
require the approval of both Westell's and Teltrend's stockholders and is
subject to regulatory approvals and other customary conditions. 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 merger and related expenses upon the closing of the deal which is expected
to occur in the fourth quarter of Westell's Fiscal Year 2000. Goldman, Sachs &
Co. and Hambrecht & Quist acted as Westell's financial advisors while Soundview
Financial advised Teltrend.
Teltrend Inc., established in 1979 with over 500 employees worldwide, is
headquartered in suburban Chicago. Teltrend designs, manufactures and markets a
broad range of telecommunications and data communications products used by
businesses and telephone companies to provide voice and data services. The
Company's customers range from Regional Bell Operating Companies, GTE, Sprint,
and other U.S. and International telephone companies, to SOHO and medium-sized
business. Additional information can be obtained by visiting Teltrend's Web site
at www.teltrend.com.
Westell Technologies, Inc, headquartered in Aurora, Illinois, is a holding
company for Westell, Inc. and Conference Plus, Inc. Westell, Inc. manufactures
and licenses DSL systems and value added CPE, and manufactures
telecommunications access products. Conference Plus, Inc. is an Applications
Service Provider managing and hosting audio, video, IP conferencing and support
services. Additional information can be obtained by visiting Westell's Web site
at www.westell.com.
"Safe Harbor" statement under the Private Securities Litigation Reform Act
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of 1995:
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Certain statements contained herein including, without limitation, the
combined Company will be a leader in local loop solutions, Westell expects to
realize significant synergies as a result of the transaction, including
increases in operating leverage, sales channel strength, and scale as well as a
decrease in combined operating expenses, the combined Company's headquarters and
manufacturing facility will be based in Aurora, Illinois, "We believe we will
realize a high degree of synergy in our companies enabling the combined entity
to more effectively serve the market with an expanded product portfolio", "The
combination of Westell and Teltrend will provide enormous benefits. We will fuel
our DSL initiatives while at the same time build a stronger operating base and
increase our scale", "Westell's high growth initiatives, innovation, and
presence in the marketplace provide a great fit with Teltrend. Our shareholders,
customers and employees will benefit from an increased presence in our core
business and expansion into the DSL arena", are 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 more
fully described in Westell's Annual Report on Form 10-K for the fiscal year
ended March 31, 1999 under the section "Risk Factors" and Teltrend's Annual
Report on Form 10-K for the fiscal year ended July 31, 1999. Westell and
Teltrend undertake no obligation to release publicly the result of any revisions
to these forward looking statements that may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events