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Xircom acquires Omnipoint Technologies from VoiceStream Wireless Corporation
HONG KONG, 15 June 2000 - Xircom, Inc. (Nasdaq: XIRC), a provider of mobile information access solutions, announcedits acquisition of Omnipoint Technologies, Inc.
HONG KONG, 15 June 2000 - Xircom, Inc. (Nasdaq: XIRC), a provider of mobile information access solutions, announced
its acquisition of Omnipoint Technologies, Inc. (OTI), a wholly owned subsidiary of VoiceStream Wireless Corporation
(Nasdaq: VSTR).
This acquisition is a key element of Xircom's strategy to be a total provider of wireless data solutions for Wide Area, Personal Area, and Local Area Networks.
Under the terms of the agreement, VoiceStream will become a minority investor in Xircom by holding 1,201,079 shares of Xircom common stock to be exchanged for all outstanding shares of OTI.
Based on Xircom's June 12, 2000, closing price, the stock exchanged would have a value of $52.2 million.
In addition, Xircom assumes certain liabilities, and unvested employee stock options with an in-the-money value of approximately $8.3 million as of June 9, 2000.
This acquisition will be accounted for as a purchase, and Xircom expects to incur a charge to earnings related to the write-off of purchased in-process research and development of between $15 and $25 million during the quarter ended June 30, 2000. The transaction is expected to close within three weeks.
Xircom expects the acquisition to become accretive to earnings in the second year of operations. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions. Robert R. Stapleton, President and Director of VoiceStream will accept a seat on Xircom's Board of Directors.
The acquisition of OTI enhances Xircom's wireless position by adding Wide Area Network (WAN), Global System for Mobile Communications (GSM), and General Packet Radio Service (GPRS) products and technology to its wireless data access solutions.
Recently, OTI has focused on creating wireless data products based on GPRS technology and Xircom will leverage this expertise to move into current and next generation wireless solutions.
"The combination of Xircom's expertise in mobile data devices and OTI's GPRS technology will bring users unparalleled mobile access and connectivity," said Bo Piekarski, Vice-President of Strategic Business Initiatives for OTI.
"Xircom's acquisition of OTI and alliance with VoiceStream will provide Xircom with access to a new market with 250 million worldwide GSM customers today," said John Stanton, Chairman, and Chief Executive Officer of VoiceStream.
General Packet Radio Service (GPRS)
GPRS works in conjunction with the GSM voice network and is expected to be available in all areas where there is GSM coverage.
GPRS enables mobile users to access the Internet, retrieve email, and connect to home and office networks with speeds up to 115 Kbps, depending upon the network operator's service offerings.
It is anticipated that network operators will roll out GPRS in late 2000 or early 2001.
Global System for Mobile Communications (GSM)
Global System for Mobile Communications (GSM) is an international digital radio standard, created by the European Telecommunications Standards Institute.
Developed to allow users to roam freely among markets, it has become the globally accepted standard since the first systems began commercial operation in 1991.
Adopted by 142 countries, GSM is the most widely used digital wireless standard in the world with approximately 300 million subscribers on six continents.
In North America, GSM serves 3.6 million customers, with approximately 11 new cities going online each day.
GSM offers unprecedented international and domestic roaming advantages to wireless consumers.
About VoiceStream
Based in Bellevue, WA, VoiceStream Wireless provides wireless communications services in the United States. VoiceStream Wireless with Cook Inlet Region Inc., has licenses to provide service to over 218 million people with operating systems in the United States.
VoiceStream is a member of the North American GSM Alliance LLC, a group of U.S. and Canadian digital wireless PCS carriers. The GSM Alliance helps provide GSM wireless communications for their customers in more than 4,000 U.S. and Canadian cities and towns as well as international service.
In February 2000, VoiceStream acquired Omnipoint Corporation, the parent of OTI and Omnipoint Communications, a GSM carrier. VoiceStream is retaining all Omnipoint Communications' networks and FCC licenses.
About Xircom, Inc.
Xircom designs and develops solutions that connect mobile users worldwide to corporate networks, the Internet, Intranets and other online resources.
Xircom sells and supports its products in over 100 countries through distributors, resellers, electronic channels and global OEM partnerships.
Headquartered in Thousand Oaks, Calif., with regional headquarters in Belgium, Japan and Singapore, Xircom has 1,700 employees worldwide and trailing four-quarter revenue of US$459 million.
This acquisition is a key element of Xircom's strategy to be a total provider of wireless data solutions for Wide Area, Personal Area, and Local Area Networks.
Under the terms of the agreement, VoiceStream will become a minority investor in Xircom by holding 1,201,079 shares of Xircom common stock to be exchanged for all outstanding shares of OTI.
Based on Xircom's June 12, 2000, closing price, the stock exchanged would have a value of $52.2 million.
In addition, Xircom assumes certain liabilities, and unvested employee stock options with an in-the-money value of approximately $8.3 million as of June 9, 2000.
This acquisition will be accounted for as a purchase, and Xircom expects to incur a charge to earnings related to the write-off of purchased in-process research and development of between $15 and $25 million during the quarter ended June 30, 2000. The transaction is expected to close within three weeks.
Xircom expects the acquisition to become accretive to earnings in the second year of operations. The acquisition has been approved by the board of directors of each company and is subject to various closing conditions. Robert R. Stapleton, President and Director of VoiceStream will accept a seat on Xircom's Board of Directors.
The acquisition of OTI enhances Xircom's wireless position by adding Wide Area Network (WAN), Global System for Mobile Communications (GSM), and General Packet Radio Service (GPRS) products and technology to its wireless data access solutions.
Recently, OTI has focused on creating wireless data products based on GPRS technology and Xircom will leverage this expertise to move into current and next generation wireless solutions.
"The combination of Xircom's expertise in mobile data devices and OTI's GPRS technology will bring users unparalleled mobile access and connectivity," said Bo Piekarski, Vice-President of Strategic Business Initiatives for OTI.
"Xircom's acquisition of OTI and alliance with VoiceStream will provide Xircom with access to a new market with 250 million worldwide GSM customers today," said John Stanton, Chairman, and Chief Executive Officer of VoiceStream.
General Packet Radio Service (GPRS)
GPRS works in conjunction with the GSM voice network and is expected to be available in all areas where there is GSM coverage.
GPRS enables mobile users to access the Internet, retrieve email, and connect to home and office networks with speeds up to 115 Kbps, depending upon the network operator's service offerings.
It is anticipated that network operators will roll out GPRS in late 2000 or early 2001.
Global System for Mobile Communications (GSM)
Global System for Mobile Communications (GSM) is an international digital radio standard, created by the European Telecommunications Standards Institute.
Developed to allow users to roam freely among markets, it has become the globally accepted standard since the first systems began commercial operation in 1991.
Adopted by 142 countries, GSM is the most widely used digital wireless standard in the world with approximately 300 million subscribers on six continents.
In North America, GSM serves 3.6 million customers, with approximately 11 new cities going online each day.
GSM offers unprecedented international and domestic roaming advantages to wireless consumers.
About VoiceStream
Based in Bellevue, WA, VoiceStream Wireless provides wireless communications services in the United States. VoiceStream Wireless with Cook Inlet Region Inc., has licenses to provide service to over 218 million people with operating systems in the United States.
VoiceStream is a member of the North American GSM Alliance LLC, a group of U.S. and Canadian digital wireless PCS carriers. The GSM Alliance helps provide GSM wireless communications for their customers in more than 4,000 U.S. and Canadian cities and towns as well as international service.
In February 2000, VoiceStream acquired Omnipoint Corporation, the parent of OTI and Omnipoint Communications, a GSM carrier. VoiceStream is retaining all Omnipoint Communications' networks and FCC licenses.
About Xircom, Inc.
Xircom designs and develops solutions that connect mobile users worldwide to corporate networks, the Internet, Intranets and other online resources.
Xircom sells and supports its products in over 100 countries through distributors, resellers, electronic channels and global OEM partnerships.
Headquartered in Thousand Oaks, Calif., with regional headquarters in Belgium, Japan and Singapore, Xircom has 1,700 employees worldwide and trailing four-quarter revenue of US$459 million.
