Filed by: Paradyne Networks, Inc.
Pursuant to Rule 425 under the Securities
Act of 1933 and deemed filed pursuant to
Rule 14a-6(b) under the Securities Exchange Act of 1934
Subject Company: Elastic Networks Inc.
Commission File No.: 333-76814
Date: February 11, 2002
Paradyne Networks, Inc. ("Paradyne") today presented the following
information at a conference with investors:
PARADYNE TO ACQUIRE ELASTIC NETWORKS
- - Scheduled to close March 5, 2002
- - Highlights:
- Launches Paradyne into the in-building market
- Expands our customer base with additional ITCO's and strong
in-building customers (i.e., Verizon Avenue, Six Continents
Hotels)
- Strengthens our balance sheet and provides additional cash and
working capital
- Additional technology and product innovations in their
EtherLoop and EtherLoop II
- - Transaction originally valued at $28.8M
- Adjusted net working capital $16.8M
- Enterprise Value 12.0M
- - Exchange Ratio
- For each Elastic share, Elastic shareholders receive .1990 to
.2692 shares of Paradyne (6.6M shares to 9M shares)
- Based on 10 day average closing price of Paradyne prior to
March 5, 2002 close
- Ratio subject to adjustment based on net working capital of
Elastic as of February 15, 2002
The material contained in this filing contains "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended, as
applicable, particularly those statements regarding the effects of the
acquisition of Elastic Networks Inc. ("Elastic") by Paradyne, and those preceded
by, followed by or that otherwise include the words "believes," "expects,"
"anticipates," "intends," "estimates," or similar expressions. For those
statements, Paradyne claims the protection of the safe harbor for
forward-looking statements contained in the Private Securities Litigation Reform
Act of 1995. Forward-
looking statements relating to expectations about future results or events are
based upon information available to Paradyne as of today's date, and Paradyne
does not assume any obligation to update any of these statements. The
forward-looking statements are not guarantees of the future performance of
Paradyne or the combined company and actual results may vary materially from the
results and expectations discussed. For instance, while Paradyne and Elastic
have entered into a definitive agreement, there is no assurance that the parties
will complete the transaction. In the event the companies do not receive
necessary stockholder or other approvals or fail to satisfy conditions to
closing, the transaction will terminate. Additional risks and uncertainties
related to the acquisition include, but are not limited to, conditions in the
financial markets relevant to the proposed acquisition, the successful
integration of Elastic into Paradyne's business, and each company's ability to
compete in the highly competitive data communications equipment industry. The
revenues and earnings of Paradyne and the combined company and their ability to
achieve their planned business objectives will be subject to a number of factors
that make estimates of future operating results uncertain. These factors
include: the timing and amount of expense reduction; the uncertainty of
litigation, including putative stockholder class actions; a reliance on
international sales; rapid technological change that could render Paradyne's or
the combined company's products obsolete; the uncertain acceptance of new
telecommunications services based on DSL; substantial dependence on network
service providers who may reduce or discontinue their purchase of products or
services at any time; the timing and amount of, or cancellation or rescheduling
of, orders of Paradyne's or the combined company's products to existing and new
customers; possible inability to sustain revenue growth or profitability;
dependence on only a few customers for a substantial portion of Paradyne's or
the combined company's revenue; highly competitive markets; reliance on sales of
access products to BB Technologies Corporation (a newly formed subsidiary of
SOFTBANK CORP.), Lucent Technologies and Avaya Inc.; dependence on sole and
single-source suppliers and the reliability of the raw materials supplied by
them to manufacture products under customer contracts; a long and unpredictable
sales cycle; the number of DSL lines actually deployed by BB Technologies
Corporation and other DSL customers as compared to forecasts; Paradyne's or the
combined company's ability to manufacture adequate quantities of products at
forecasted costs under customer contracts; Paradyne's or the combined company's
ability to manufacture products in accordance with its published specifications;
and other risks identified from time to time in Paradyne's and Elastic's SEC
reports and public announcements.
The proposed transaction will be submitted to Paradyne's and Elastic's
stockholders for their consideration. Paradyne has filed with the SEC a
registration statement containing a definitive joint proxy statement-prospectus
regarding the proposed transaction, as well as other relevant documents
concerning the proposed transaction. STOCKHOLDERS OF PARADYNE AND ELASTIC ARE
URGED TO READ THE DEFINITIVE JOINT PROXY STATEMENT-PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS
TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. THE DEFINITIVE
JOINT PROXY STATEMENT-PROSPECTUS HAS BEEN SENT TO PARADYNE'S AND ELASTIC'S
STOCKHOLDERS SEEKING THEIR APPROVAL OF THE PROPOSED TRANSACTION. YOU CAN OBTAIN
FREE COPIES OF THESE DOCUMENTS AT THE SEC'S INTERNET
SITE (HTTP://WWW.SEC.GOV). COPIES OF THE DEFINITIVE JOINT PROXY
STATEMENT-PROSPECTUS AND THE SEC FILINGS THAT ARE INCORPORATED BY REFERENCE IN
THE DEFINITIVE JOINT PROXY STATEMENT-PROSPECTUS CAN ALSO BE OBTAINED, WITHOUT
CHARGE, BY DIRECTING A REQUEST TO: PARADYNE, INVESTOR RELATIONS 727-530-8082.
Paradyne and Elastic and their respective directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Paradyne and Elastic in connection with the acquisition.
Information regarding those participants is included in the proxy statements for
the Paradyne and Elastic annual stockholders' meetings for 2001, which are
available at the SEC's website. Additional information regarding the interests
of those participants may be obtained by reading the definitive joint proxy
statement-prospectus regarding the proposed transaction.