Monday, March 19, 2007

GENBAND to Acquire Tekelec's Switching Solutions Group

GENBAND agreed to acquire Tekelec's Switching Solutions Group (SSG). The deal is structured as a sale of Tekelec's equity interests in Santera Systems and Taqua, and the SSG business assets held by Tekelec in exchange for a 19.9% common equity interest in GENBAND, $1.0 million in cash and GENBAND's assumption of certain SSG liabilities. Twenty-five percent of the equity issuable at closing will be held in escrow for one year pending the expiration of the indemnity period. Tekelec will have no operational role in GENBAND and will account for its investment under the cost method of accounting.

The acquisition will expand GENBAND's portfolio of infrastructure, applications and services for wireline, wireless and cable service providers. Tekelec's switching solutions business unit includes the businesses Santera, VocalData and Taqua, all of which had been acquired by Tekelec between 2003 and 2004. GENBAND said this portfolio of wireline and wireless media gateways and application platforms are synergistic with its existing gateway and application portfolio.

Charles D. Vogt, President and CEO of GENBAND said "The combination of the two companies creates an enviable gateway and applications product portfolio and enables GENBAND to strengthen our relationship with our existing customers and business partners."

Tekelec has approximately 465 employees directly and indirectly associated with SSG. The majority of these employees will transfer to GENBAND, and the remainder will be terminated in a restructuring at the time of closing.