Wednesday, April 4, 2007

Verso to Acquire sentitO for VoIP Gateway

Verso Technologies agreed to acquire privately held sentitO Networks, a supplier of voice gateways, for approximately 7.7 million restricted shares of Verso common stock, 2.2 million of which are subject to escrow provisions, and warrants to purchase approximately 841,000 shares of Verso common stock, subject to certain conditions and approvals. Shares in Verso (Nasdaq: VRSO) traded on Thursday at $0.96.

Founded in 2000, sentitO supplies open and distributed VoIP gateway solutions for telecommunications service providers worldwide. The sentitO Open Network Xchange (ONX) architecture enables new, innovative voice services by providing media and signaling conversion utilizing session initiation protocol (SIP) technology.

Verso said the acquisition complements its existing portfolio and opens up new distribution and market opportunities. Verso intends to maintain its valuable relationship with AudioCodes as a source for optical and other gateway products.

Verso expects that certain of sentitO's resellers and their strategic affiliations in Russia will allow Verso to expand in the Russian and Eastern European markets with an experienced partner.

Pursuant to the merger agreement, an additional $3.0 million of Verso common stock will be issued through an earn-out provision based on Verso achieving a $12.0 million revenue target during the 12 month period following the closing of the acquisition that is attributable to the sentitO business. In addition, the merger agreement provides that 1.2 million shares of Verso common stock will be held in escrow and released based upon the completion of certain in-progress customer activity and approximately 1.0 million shares of Verso common stock will be held in escrow to satisfy potential indemnity claims.

  • In January 2007, Verso Technologies acquired the iMarc product line from Paradyne Networks, Inc., a subsidiary of Zhone Technologies. Verso had previously served as a reseller of Zhone products. Under the deal, Verso will pay $2.5 million. In addition, Zhone will provide contract manufacturing services to Verso for a period of up to six months. Verso will then purchase from Zhone the inventory relating to the iMarc product line.

  • In August 2006, sentitO Networks raised $6 million in venture financing for its intelligent voice gateway and signaling solution. The funding round was led by Columbus Nova Capital, an affiliate of Russian-based RENOVA Group of Companies, with previous investors Core Capital Partners, Inflection Point Ventures, Kodiak Venture Partners, Mid-Atlantic Venture Funds, and Technology Venture Partners also participating.

  • sentitO's Open Network Xchange (ONX) architecture and distributed VoIP media and signaling gateway solutions provide media and signaling conversion between the PSTN and IP networks. sentitO's ONX solution set includes the IVG1200 Intelligent Voice Gateway, Proxy7 Signaling Gateway, and PreVision Network Manager.

  • sentitO recently announced it has been certified to commercially deploy its VoIP infrastructure equipment in Russia by Infokom, the Center of Examination and Certification. The certification confirms mandatory quality, functionality and interoperability requirements for commercial deployment in Russian networks. sentitO's VoIP infrastructure products are currently deployed in China, Denmark, Dominican Republic, Honduras, Russia, Singapore, and the U.S., among others.

See also