Filed by: Paradyne Networks, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: Elastic Networks Inc.
Commission File No.: 333-76814
Date: March 5, 2002
Paradyne Networks, Inc. and Elastic Networks Inc. today issued a press
release announcing that Paradyne had completed the acquisition of Elastic. The
press release is attached to this filing as Appendix A and is incorporated
herein by reference.
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 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. Risks and uncertainties related to the acquisition
include, but are not limited to, conditions in the financial markets relevant to
the 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.
APPENDIX A
[PARADYNE LOGO]
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION, PLEASE CONTACT:
Investor Relations Press Relations
727-530-8082 Jennifer Righi
ir@paradyne.com 727-530-2529
jrighi@paradyne.com
PARADYNE COMPLETES ACQUISITION OF ELASTIC NETWORKS
Strengthens Presence in the DSL Market with In-Building DSL
Offerings and 10 Mbps over Existing Copper Using EtherLoop Technology
LARGO, FLORIDA AND ATLANTA, GEORGIA - MARCH 5, 2002 - Paradyne Networks, Inc.
(NASDAQ: PDYN) and Elastic Networks Inc. (NASDAQ: ELAS) today announced that
Paradyne has completed its acquisition of Elastic Networks, after receiving
approval from their respective stockholders. Based on Paradyne's 10-day average
closing price of $3.88 and a previously announced working capital adjustment
factor of 1.0, Elastic stockholders will receive .2288 shares of Paradyne common
stock in exchange for each outstanding share of Elastic common stock. Commencing
Wednesday, March 6, 2002, Elastic's common stock will no longer trade on the
Nasdaq National Market.
As a result of this acquisition, Elastic has become a wholly owned subsidiary of
Paradyne. This transaction is being accounted for using purchase accounting.
In connection with the acquisition of Elastic, Paradyne's stockholders also
approved an increase in the authorized number of shares of Paradyne common stock
from 60,000,000 to 80,000,000.
"I am excited and pleased to welcome the Elastic team into Paradyne," said Sean
Belanger, president and CEO of Paradyne. "This acquisition represents a natural
extension of Paradyne's DSL business and accelerates our ability to provide a
cost-effective high-speed access solution for the in-building broadband market.
As we stated in December, this acquisition, when combined with Paradyne's
current DSL
strengths around the world, solidifies our position as a leading player for
extending DSL into unserved areas and providing reliable solutions for
high-speed access within in-building environments. The transaction also
strengthens Paradyne's cash position."
The completion of the acquisition broadens the array of DSL options available to
both Elastic and Paradyne customers. The company's portfolio of equipment
solutions will now include reliable, high-speed DSL solutions for both central
office (CO) and in-building environments. In addition to the typical DSL
solutions, Paradyne can offer ReachDSL(TM) or EtherLoop(TM) technology for
either ATM or IP-based networks.
ABOUT PARADYNE
Paradyne is a leading developer of carrier-class, high-speed network access
solutions. A recognized market leader in digital subscriber line (DSL) and
service level management (SLM) solutions, Paradyne markets its award-winning
Hotwire(R) DSL, ReachDSL and FrameSaver(R) Service Level Management systems to
service providers and business customers. More than 20,100 Hotwire DSL Access
Multiplexers (DSLAMs) have been deployed around the world. Paradyne has shipped
over 296,000 ports of its unique ReachDSL solution, giving carriers the ability
to deliver broadband over almost any copper lines, even those that are very long
or severely impaired. Paradyne's SLM solutions have been deployed into
mission-critical enterprise networks by the leading carriers, including AT&T,
Bell Canada, Broadwing, Intermedia, SBC, Sprint, Verizon, and WorldCom.
Paradyne is headquartered in the Tampa Bay area. More information is available
by calling 1-800-PARADYNE (U.S. and Canada) or 1-727-530-8623.
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"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995
Statements in this press release regarding Paradyne's business, which are not
historical facts, are "forward-looking statements" that involve risks and
uncertainties. For a discussion of such risks and uncertainties, which could
cause actual results to differ from those contained in the forward-looking
statements as well as other information about the acquisition of Elastic, please
refer to Paradyne's and Elastic's joint proxy statement-prospectus dated January
30, 2002, Paradyne's Current Report on Form 8-K dated January 16, 2002 and
Paradyne's other filings with the Securities and Exchange Commission.
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