Dialogic Corporation, a pioneer in enabling interactive mobile
video services and applications, and Veraz Networks (NASDAQ: VRAZ),
a leading provider of bandwidth optimization and next generation
switching products, today announced that they have entered into a
definitive agreement to merge.
After closing, the name of the merged company will be Dialogic,
and it will be a global leader in communications products and
services to the telecommunications service provider and enterprise
markets. The merged company is expected to be led by Nick Jensen as
Chairman of the Board and Chief Executive Officer (current Chairman
of the Board and Chief Executive Officer of Dialogic), and Doug
Sabella as President and Chief Operating Officer (current Veraz
President and Chief Executive Officer), with headquarters in San
Jose, CA.
"While the capability of mobile networks around the world has
been steadily expanding, the future will bring even greater demands
on the networks due to the unprecedented growth in global mobile
data and video traffic," said Nick Jensen, Chairman of the Board
and CEO of Dialogic. "By combining Dialogic's proven expertise in
application enablement for voice and video with Veraz's leadership
in voice, data, session control, security, and transport, we will
be creating a company with innovative products that will enable our
customers to unleash the profit of video, voice and data for 3G/4G
networks."
Over 80% of the Fortune 2000 companies and service providers
worldwide rely on Dialogic's application-enabling technologies,
putting Dialogic at the forefront of enabling high quality video on
wireless and wireline networks. Today, over 130 service providers
in over 80 countries rely on Veraz's next generation switching and
bandwidth optimization products and services to leverage the power
of IP to deliver high quality voice and data services while
lowering their operational and capital costs.
"The merger of Veraz and Dialogic will create a new and exciting
company with the product portfolio and resources to be a true
mission critical supplier to service providers," said Doug Sabella,
President and CEO of Veraz Networks. "The combination of Veraz's
direct global footprint and Dialogic's channels will create a
company of substantial size with global reach and resources, thus
allowing our customers to be extremely confident when they choose
to partner with us."
Following the merger and subsequent integration of the two
companies, on an annualized basis (after excluding adjustments to
revenue and expenses under purchase accounting rules, transaction
related costs and one-time charges), the merged company revenues
are expected to be greater than $250 million with gross margins of
60-65% and EBITDA of 10-15% of revenues (earnings before interest,
taxes, depreciation, amortization, and stock compensation expenses
and including expected operational cost synergies). The merged
company will have a diverse customer base with no customer
concentration.
Under the terms of the agreement, unanimously approved by each
company's Board of Directors, Veraz will issue shares of its common
stock to each Dialogic shareholder so that following the closing of
the transaction, Dialogic shareholders will own approximately 70%
and Veraz shareholders will own approximately 30% of the merged
company. For further information regarding the acquisition
agreement, interested parties should refer to the Form 8-K filed by
Veraz on or about this date. The transaction is expected to close
in the second half of 2010, subject to regulatory approvals,
shareholder approvals, and customary closing conditions.
Veraz is currently traded on NASDAQ and it is expected that the
merged company will continue to be traded on NASDAQ. The merged
company is expected to benefit from operational cost synergies and
is expected to realize revenue synergies by combining complementary
product portfolios, as well as by optimizing the established global
sales and distribution channels.
Jefferies & Company, Inc. acted as the exclusive financial
advisor to Dialogic, and Pagemill Partners acted as the exclusive
financial advisor to Veraz.
Veraz Networks and Dialogic will host a conference call for
investors on May 13, 2010 at 8:30 am Eastern Time which will also
include forward-looking information. The webcast and a presentation
regarding the merger will be available from the "Investor
Relations" section of the Veraz website (www.veraznetworks.com).
For parties in the United States and Canada, call 1-800-860-2442 to
access the conference call. International parties can access the
call at +1-412-858-4600.
The webcast will be archived for a period of 90 days. A
telephonic replay of the conference call will also be available two
hours after the call and will run for two days. To hear the replay,
parties in the United States and Canada should call 1-877-344-7529
and enter passcode 60000#. International parties should call
+1-412-317-0088 and enter passcode 60000#.
About Dialogic Dialogic Corporation is a
leading provider of world-class, innovative technologies based on
open standards that enable innovative mobile, video, IP, and TDM
solutions for Network Service Providers and Enterprise
Communication Networks. Dialogic's customers and partners rely on
its leading-edge, flexible components to rapidly deploy value-added
solutions around the world.
Information about Dialogic is available at
http://www.dialogic.com/. Also, join our social networking
community, the Dialogic Exchange Network (DEN), at
www.dialogic.com/den or visit our Facebook, Twitter and YouTube
pages for additional Dialogic news and updates.
Dialogic is a registered trademark of Dialogic Corporation.
About Veraz Veraz Networks, Inc. (NASDAQ:
VRAZ), is the leading provider of application, control, and
bandwidth optimization products that enable the evolution to the
Multimedia Generation Network (MGN). Service providers worldwide
use the Veraz MGN portfolio to extend their current application
suite and rapidly add customized multimedia services that drive
revenue and ensure customer retention. The Veraz MGN separates the
control, media, and application layers while unifying management of
the network, thereby increasing service provider operating
efficiency. Wireline and wireless service providers in over 60
countries have deployed products from the Veraz MGN portfolio,
which includes the ControlSwitch™, Network-adaptive Border
Controller, I-Gate 4000 Media Gateways, the VerazView Management
System, and a set of prepackaged applications. For more information
regarding the company, please visit www.veraznetworks.com.
This press release contains forward-looking statements regarding
future events that involve risks and uncertainties. Readers are
cautioned that these forward-looking statements are only
predictions and may differ materially from actual future events or
results. Potential risks and uncertainties include, among others,
the possibility that the transaction will not close or that the
closing may be delayed, the anticipated synergies of the combined
companies may not be achieved after closing, the combined
operations may not be successfully integrated in a timely manner,
anticipated revenues, gross margin and operating income may not be
achieved, general economic conditions in regions in which either
company does business may have a negative effect on their
respective businesses, and the possibility that Veraz or Dialogic
may be adversely affected by other economic, business, and/or
competitive factors. Additional risks and uncertainties that could
cause Veraz results to differ materially from those expressed or
implied by such forward-looking statements include but are not the
other risks and uncertainties described more fully in Veraz
documents filed with or furnished to the SEC. More information
about these and other risks that may impact Veraz' business is set
forth in the "Risk Factors" section in Veraz Annual Report on Form
10-K for the year ended December 31, 2009 as filed with the SEC.
This filing is available on a website maintained by the SEC at
http://www.sec.gov/. All forward-looking statements in this press
release are based on information available to Dialogic as of the
date hereof, and Dialogic assumes no obligation to update these
forward-looking statements.
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Contact: Kristen Perry Dialogic +1 (973) 967-6665 Email Contact
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