EXHIBIT 99.5
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
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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.
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"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
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Newbridge Networks to Acquire Stanford Telecommunications page 4
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 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.
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Newbridge and logo are registered trademarks of Newbridge Networks Corporation.
Stanford Telecom and Stanford Wireless Broadband are registered trademarks of
Stanford Telecommunications Inc.
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