EXHIBIT 99.3
Newbridge Networks to Acquire Stanford Telecommunications
Further Strengthens Industry Leadership in Broadband Wireless Market
KANATA, Ontario and SUNNYVALE, California, June, 22, 1999 -- Newbridge
Networks (NYSE: NN; TSE: NNC) today announced it has signed a definitive
agreement to acquire Stanford Telecommunications, Inc. (STII: Nasdaq), a leading
supplier of key broadband wireless technology and products.
The boards of directors of Newbridge Networks and Stanford
Telecommunications have approved an agreement and plan of merger, subject to
conditions including approval by Stanford Telecom's stockholders, whereby
Newbridge will acquire all of the outstanding shares of common stock of Stanford
Telecom in a tax-free, stock-for-stock exchange.
After proceeds from the divestiture of unrelated businesses, the Stanford
Telecom acquisition is expected to have a net cost to Newbridge of approximately
US$280 million. The parties expect to close the transaction by November of this
year. In addition to being subject to the approval of Stanford Telecom's
stockholders, the transaction is conditional on the execution of a definitive
agreement for the sale of the other operations, receipt of regulatory approvals
and other customary closing conditions. The transaction will be accounted for
under the purchase method of accounting.
Under the agreement Stanford Telecom stockholders will receive for each
share of common stock US$30 in Newbridge stock plus a contingent value right
(CVR) which will give them a participation in the proceeds on the sale of other
operations above a minimum amount. This participation will also be payable in
the form of Newbridge common shares. The CVR may have a value of up to US$5 per
share.
For the purpose of this transaction, the value of a Newbridge common share
shall equal the ten-day average closing price on the NYSE, ending on the fifth
trading day immediately preceding Stanford Telecom's stockholder vote, expected
in October. If the Newbridge stock price, pursuant to this calculation, is below
US$24 and Newbridge does not exercise its right to adjust the exchange ratio,
Stanford Telecom's board will be permitted to terminate the Agreement.
Upon closing, Newbridge intends to retain the Wireless Broadband Products
group, which currently forms part of Stanford Telecom's wholly-owned subsidiary
Stanford Telecom Wireless Broadband, Inc., and other associated groups, which
are presently held in Stanford Telecom's Base Business Operations. Stanford
Telecom and Newbridge have agreed that Stanford Telecom's other operations,
including SATCOM Ground Systems, Communications Systems Integration, Applied
Technology Operation, Advanced Communications Systems and Manufacturing and
Quality Assurance, will be sold to third parties.
Pursuant to the merger agreement, Stanford Telecom has also granted
Newbridge an option to acquire a non-exclusive license to its broadband wireless
technology which would be exercisable under a change of control of Stanford
Telecom.
"Newbridge moved into the broadband wireless market space last year and at
that time we expressed a conservative view of the potential revenue from this
business," said Alan Lutz, president and chief operating officer, Newbridge
Networks. "Since then we have won 15 new customer contracts, we have been
selected for 13 additional field trials, and we are in discussions with 30
potential new customers. By acquiring Stanford Telecom, we have acquired access
to the source of the time division multiple access (TDMA) technology which
contributes to differentiating our product offering from the competition.
"Under the acquisition, which we expect will be break-even in the first
year and accretive to Newbridge earnings thereafter, on an operating basis,
excluding goodwill. Newbridge will retain Stanford Telecom's Wireless Broadband
Products group, Telecommunications Components Products group and the Satellite
Personal Communications group. The Newbridge wireless development team in
Sunnyvale will become a center of excellence for broadband wireless
technologies, including development of multiple access wireless modems, highly
integrated subscriber units and custom ASICs.
"Newbridge and Stanford Telecom have enjoyed a long-standing, successful
relationship. Stanford Telecom's unique technology has been integrated into the
comprehensive Newbridge LMDS solution," continued Mr. Lutz. "By acquiring
Stanford Telecom, Newbridge further extends its leadership position in the
broadband wireless market. We deliver the industry's most powerful solution,
extending from the broadband network core to the customer premise. This enables
service providers to reduce capital outlay and enhance network performance,
while capitalizing on the steep demand for broadband wireless services through a
solution with quality and reliability equal to or better than that available
over wireline facilities, such as fiber."
"Newbridge knows the Stanford Telecom team -- the people, the culture and
the technology -- and Stanford Telecom knows the Newbridge team," said Dr. Val
P. Peline, president and chief executive officer, Stanford Telecommunications.
"Marrying the strengths of the two companies delivers the industry leading
solution from a single vendor that immediately addresses a substantial global
market opportunity."
This news release may include certain forward-looking statements that
involve risks and uncertainties. Actual results may differ materially from
results indicated in any forward-looking statements. Newbridge cautions that,
among other things, in view of the rapid technological changes in the networking
industry, if technologies or standards supported by Newbridge products or common
carrier service offerings based on Newbridge products become obsolete or fail to
gain widespread commercial acceptance, the Company's business may be adversely
affected. Additional information identifying risks and uncertainties is
contained in most recent Newbridge Form 10-Q quarterly report and Form 10-K
annual report filed with the SEC.
Stanford Telecom designs, manufactures and markets advanced digital
communications products and systems to establish or enhance communications via
terrestrial wireless, satellites
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and cable. Stanford Telecom's technical strengths include: system design,
communication waveforms, modulation and demodulation techniques, ASIC design,
radio frequency (RF) antennas and converters, software and firmware,
asynchronous transfer mode design and advanced manufacturing techniques and
processes. Stanford Telecom was founded in 1973, maintains headquarters in
Sunnyvale, California and employs over 1,000 people at its various locations
throughout the United States. News and information are available at
www.stelhq.com.
Newbridge Networks designs, manufactures, markets and services wide area
networking solutions for Internet service providers; local, long-distance, and
wireless communications companies; cable television carriers; and enterprise
customers in more than 100 countries. The Company leverages its relationship
with more than 20 Newbridge Affiliate companies and strategic alliances with
numerous other networking companies to deliver complete, end-to-end solutions.
Newbridge customers include the world's 350 largest telecommunications service
providers and more than 10,000 corporations, government organizations and other
institutions. Founded in 1986, the Company employs more than 6,000 people on six
continents. News and information are available at www.newbridge.com.
Newbridge Networks and Stanford management will be hosting a conference
call on Tuesday, June 22nd at 5:30 p.m. Eastern Daylight time.
Telephone Conference Call
Please call in 10 minutes prior to the start of the call
North America: 1-800-553-3709
International: 1-303-267-1007
Audio Web Cast (listen only mode)
Newbridge web site: www.newbridge.com
For more information, contact Corporate Communications.
Newbridge and logo are registered trademarks of Newbridge Networks Corporation.
Stanford Telecom and Stanford Wireless Broadband are registered trademarks of
Stanford Telecommunications Inc.
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