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 HILLSBORO,
Oregon – July 27, 2006
RadiSys Corporation (Nasdaq: RSYS), a leading global
provider of advanced embedded systems, today announced that it has entered
into a definitive agreement to acquire privately-held Convedia Corporation,
the global leader in IP media processing technologies and IP Media Server
products. Convedia’s platform products are at the heart of VoIP
(“Voice-over-Internet Protocol”) networks and emerging IMS
(“IP Multimedia Subsystem”) deployments, enabling telecommunication
service providers to deliver a broad range of value-added multimedia services
to their residential and business customers.
The acquisition of Convedia will benefit both companies’
customers by making available a broader set of technologies and solutions
delivered by an expanded team with greater scale and breadth to fully
support customers’ product realization initiatives. It will expand
global reach and ability to service and support customer needs on a worldwide
basis. The combination will facilitate RadiSys’ penetration of the
high growth VoIP equipment and IMS infrastructure markets as well as accelerate
RadiSys’ strategy to provide turnkey networking platforms. Convedia
has deployed their products with more than 200 customers around the globe,
including 25 of the top 50 global telecommunication service providers,
and many Fortune 500 and enterprise customers. Convedia’s full family
of media servers will continue to be developed and enhanced under the
RadiSys corporate brand. In addition, the two companies will leverage
Convedia’s eXMP (eXtended Media Processing™), software technology
to operate on RadiSys’ market leading ATCA platforms to further
expand the market opportunities of the combined entity.
As the market share leader in the deployment of media servers worldwide,
Convedia’s customer traction and revenues have been growing rapidly.
For the quarter ended June 30, 2006, Convedia achieved annual run-rate
revenues of around $20 million. RadiSys currently projects that this business,
when combined with RadiSys, will grow to be a meaningful portion of total
corporate revenues over the next several years.
“We are very excited about bringing the highly talented Convedia
team into RadiSys. In addition to meaningfully expanding our platform
capabilities, Convedia complements our product portfolio, our technology
and our strategic direction extremely well,” said Scott Grout, RadiSys
President and CEO. “We believe that IMS/VoIP is an important and
growing market and that Convedia’s market leading products and strong
customer relationships, together with RadiSys’ ATCA leadership,
creates a broader and more compelling portfolio of solutions for our customers
across a larger addressable market.”
“This is the proverbial win-win for both companies and their customers,”
said Peter Briscoe, President and CEO of Convedia. “Convedia accelerates
its business plans through access to a top quality, global sales force
and world class expertise in ATCA. RadiSys enhances its networking platform
products by adding market leading IP media processing products and technologies
as well as Convedia's powerful channels and market strength in Asia-Pacific.”
The consideration for the transaction will be $105 million in cash, subject
to certain adjustments, plus an earnout of up to $10 million if Convedia
achieves certain profitability goals over the next year. The transaction
is expected to be accretive to RadiSys’ earnings per share within
the first year after closing, excluding expenses associated with the outcome
of purchase price allocation, incremental stock compensation expense,
and other noncapitalizable acquisition-related expenses. Additional details
regarding the impact of the transaction will be available upon closing.
The required pro forma financials for the combined company will be issued
no later than 75 days following the closing.
The transaction has received approval by the boards of directors of both
companies and is expected to close by the end of the quarter, subject
to customary closing conditions for a transaction of this nature. Following
the transaction, Convedia will become a wholly-owned subsidiary of RadiSys.
RadiSys (Nasdaq: RSYS) is a leading provider of advanced embedded solutions
for the Communications Networking and Commercial Systems markets. Through
intimate customer collaboration, and combining innovative technologies
and industry leading architecture, RadiSys helps OEMs bring better products
to market faster and more economically. RadiSys products include embedded
boards, platforms and systems, which are used in today's complex computing,
processing and network intensive applications. For more information, please
visit www.radisys.com.
Convedia is the leading supplier of application- and platform-independent
IP media processing products and technologies for VoIP and IMS networks.
Convedia’s products enable fixed, mobile and cable service providers
deploying IMS and pre-IMS services to reduce service delivery costs, and
more rapidly introduce new innovative voice, video, and multimedia services.
Convedia’s products enable enterprise customers to deliver new productivity
enhancing applications and services on their converged enterprise networks
while helping to reduce infrastructure and operating costs. Since pioneering
the IP media server market in early 2000, Convedia has deployed its multi-service
media processing platforms and technology with over 200 end customers
worldwide, including over 25 of world’s top 50 carriers and numerous
Fortune 500 customers. For more information, please visit www.convedia.com.
Julia Harper
Chief Financial Officer
1-503-615-1250
julia.harper@radisys.com
Brian Bronson
VP of Finance and Business Development
1-503-615-1281
brian.bronson@radisys.com
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