CONTACT:
Xxxx Xxxxxxxxx/Xxxx X. Xxxxx Xxxxxxx X. Xxxxxx/Xxxxxxxx Xxxxx
Comverse Technology, Inc. Boston Technology, Inc.
000 Xxxxxxxxx Xxxx Xxxxx 000 Xxxxxxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000 Xxxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
Comverse Technology, Inc. and Boston Technology, Inc.
Sign Definitive Merger Agreement
WOODBURY, NY, and WAKEFIELD, MA, August 21, 1997 -- Comverse Technology,
Inc. (NASDAQ:CMVT) and Boston Technology, Inc. (NYSE:BSN) announced today
the signing of a definitive agreement for the merger of Boston Technology
with Comverse Technology in a tax-free, stock-for-stock transaction, which
will be accounted for as a pooling of interests.
Under the terms of the agreement, each share of Boston Technology common
stock will be converted into 0.65 of a share of Comverse Technology common
stock. Based on Boston Technology's current number of outstanding shares,
Comverse will issue approximately 17.7 million new shares to Boston
Technology shareholders to complete the transaction. Boston Technology
shareholders will own approximately 41 percent of the resulting common
stock of Comverse, while Comverse Technology shareholders will own
approximately 59 percent. The transaction is expected to be modestly
accretive to earnings per share in the first year after the completion of
the transaction, excluding one-time merger and integrationrelated charges.
A one-time charge, covering primarily merger and integration-related costs,
is expected to be recorded in the quarter in which the transaction is
completed. The companies expect to achieve cost savings over the first year
from the consolidation of select overseas offices and through other
economic synergies. However, this transaction is a merger of two rapidly
growing organizations, and the resulting company is expected to continue to
expand its workforce and operations after the merger.
The combined company will be called Comverse Technology, Inc., and will
continue to be listed on the NASDAQ exchange. The company headquarters will
remain in Woodbury, NY. The operations of Boston Technology will be
combined with Comverse's Network Systems Division, the largest operating
unit of Comverse Technology. Comverse Network Systems Division will be
headquartered in Wakefield, MA.
Xxxx Xxxxxxxxx, Comverse Technology's Chairman, President and Chief
Executive Officer, will continue in his present
role. Xxxxxxx X. Xxxxxx, currently President and Chief Executive Officer of
Boston Technology, will become President and Chief Executive Officer of
Comverse Network Systems Division. The Board of Directors of Comverse
Technology will be expanded to nine members, and will include Xxxxxxx X.
Xxxx, who is currently Boston Technology's Chairman, and Xx. Xxxxxx.
Xxxx Xxxxxxxxx, Chairman, President and Chief Executive Officer of Comverse
Technology, said, "The strategic benefits of this merger are compelling for
a number of reasons. This is a merger of two strong, successful, rapidly
growing companies. This merger will position us as a leading supplier of
enhanced services platforms to telecommunications network operators, both
in the United States and internationally. Over the past four quarters,
Comverse and Boston have achieved sales growth of 44 percent and 60
percent, respectively, and net income growth, excluding non-recurring
gains, of 71 percent and 136 percent, respectively. Together, we will have
a powerful combination of technology, research and development
capabilities, customer service and support, sales and marketing, and a blue
chip customer base that includes seven of the ten largest
telecommunications network operators in the world."
"Our companies are complementary in a number of ways," continued Xxxxxxxxx.
"Boston Technology is a leader in several important regions, including the
United States, Japan, and Brazil, while Comverse is a leader in Europe and
other important regions. Boston Technology is a leader among wireline
network operators, and Comverse is a leader among digital wireless network
operators. Boston Technology has concentrated on very large customers,
particularly in the United States and Japan, and Comverse has a more
diverse customer base throughout the world. Together, we have more than 200
telecommunications network operator customers, including twelve of the
world's twenty largest telephone companies, with very little customer
overlap. As these telephone companies continue to launch and expand
revenuegenerating services such as voice mail, unified messaging,
information services, voice recognition-based services, text messaging, and
other personal assistant and personal communications services, we are
well-positioned to participate in this growth."
"The addition of Boston Technology's excellent management and employees to
our team," concluded Xxxxxxxxx, "brings to us a wide range of strengths,
including top-notch account management, first-class training, service and
support, and solid technical resources. They will add significant value
to our organization, and will allow us, our shareholders and our customers
to enjoy the full opportunity presented in this rapidly growing market."
Xxxxxxx X. Xxxxxx, President and Chief Executive Officer of Boston
Technology, said, "We are excited about this opportunity to, in one step,
expand our customer base, and increase and leverage our technological and
managerial strengths and resources to take full advantage of the continued
growth we see in the enhanced services arena. This combination will bring
together two teams of highly experienced, dedicated employees, with similar
corporate cultures, values and goals. This team will be able to provide our
customers with an unmatched level of engineering resources, along with a
wider range of products and services to serve their rapidly expanding needs
for world-class enhanced services."
"Comverse's excellent and experienced management team, considerable
financial resources, and strong engineering staff, which includes the
enhanced services platform industry's largest team of Advanced Intelligent
Network specialists, will enable our combined company to compete and serve
our customers on a higher level," continued Xxxxxx. "Together, we will be
able to offer our customers the best of both companies' products,
resources, technology, research and development, and service and support.
This merger is a perfect fit. In addition to the complementary nature of
our respective industry leadership positions, and our complimentary areas
of technological expertise, these two organizations are focused on a
similar set of core issues. We are committed to increasing shareholder
value, customer satisfaction, and providing an environment where talented
employees are given the opportunity to reach their full potential and are
rewarded accordingly, and where fostering innovation, and continuous
improvement and total quality are established values."
Xxxxxxx X. Xxxx, Chairman and largest individual shareholder of Boston
Technology, said, "I am excited and highly optimistic about the strategic
benefits of this merger. In addition to the complementary nature of our
leadership positions and technological expertise, Boston Technology
shareholders will benefit from a vastly expanded customer base. We have
long respected Comverse's strong, consistent record of growth, financial
performance and creation of shareholder value, and I am confident that the
combined company will continue to prosper."
The combined company is committed to preserving the investment of all of
its customers, and will continue to
market, support and enhance both companies' platforms. Both platforms will
evolve over time, to take advantage of the expanded technology and resource
strengths of the two companies.
The merger is conditioned upon the approval of each company's shareholders
and customary regulatory clearances, and is expected to be completed by the
end of 1997.
Comverse Technology, Inc., headquartered in Woodbury, New York, designs,
develops, manufactures and markets computer and telecommunications systems
for a variety of communications processing applications, including
multimedia messaging, personal communications and information processing
systems marketed to telecommunications network operators under the name
TRILOGUE(R), multiple channel, multimedia digital monitoring systems
marketed under the name AUDIODISK(TM), and multiple channel, multimedia
digital recording systems marketed under the name ULTRA(TM). For the year
ended December 31, 1996, Comverse achieved sales growth of 44 percent, and
net income growth, excluding non-recurring gains, of 61 percent. For the
six months ended June 30, 1997, Comverse's sales increased by 50 percent,
and its net income, excluding non-recurring gains, grew by 72 percent.
Comverse ended the June, 1997 quarter with record cash and cash
equivalents, bank time deposits and short-term investments of $253,885,000,
and record working capital of $310,327,000.
Boston Technology, Inc., headquartered in Wakefield, Massachusetts,
supplies innovative systems, software and services to telephone, long
distance, cellular, PCS (Personal Communications Service), cable, and other
companies in the telecommunications industry that enable them to provide
voice mail, integrated internet messaging, and other services to their
customers. Boston Technology is a worldwide market leader serving half of
the world's 20 largest telephone companies in 13 countries. For the year
ended January 31, 1997, Boston Technology achieved sales growth of 83
percent, and net income growth, excluding non-recurring items, of 188
percent. For the six months ended July 31, 1997, Boston Technology's sales
increased by 68 percent, and its net income, excluding non-recurring items,
grew by 170 percent. The company is the winner of a 1996 President's "E"
Award for Excellence in Exporting.
Internet users: For additional information, you may visit
the companies' web sites at:
xxxx://xxx.xxxxxxxx.xxx
xxxx://xxx.xxxxxxxxxxxxxxxx.xxx
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Information contained in this release with respect to the expected
financial impact of the proposed merger is forward-looking. These
statements represent the companies' reasonable judgment with respect to
future events and are subject to risks and uncertainties that could cause
actual results to differ materially. Such factors include, but are not
limited to, material adverse changes in economic and competitive conditions
in the markets served by the companies, material adverse changes in the
business and financial condition of either or both companies and their
respective customers, uncertainties concerning technological changes and
future product performance, and substantial delay in the expected closing
of the merger.
