SBE Inc. Acquires LAN Media Corporation
Acquisition Capitalizes on Complementary Expertise and Capabilities of Both Companies in the Internet-driven Telecommunications Marketplace
SAN RAMON, CA, July 14, 2000 - SBE, Inc., (NASDAQ: SBEI), a leading supplier of specialized communications and networking processing solutions, today announced that it is acquiring LAN Media Corporation (LMC), a privately held, Silicon Valley-based firm specializing in high-performance wide area network connectivity products for high-end multi protocol routers, switches, and network servers. Under the terms of the transaction, SBE will issue approximately 300,000 new shares of its common stock to LMC shareholders and will assume LMC outstanding stock options. The transaction is valued at approximately $8 million. All of the newly issued shares will be subject to specified trading restrictions.
SBE's acquisition of LMC is intended to be a tax-free transaction, which will be accounted for as a "pooling-of-interests." During its fiscal third quarter ended July 31, 2000, SBE expects to record one-time charges for acquisition-related costs of approximately $400,000. Excluding these charges, SBE expects the acquisition to be accretive to earnings per share beginning in the fiscal fourth 2000 quarter.
"LMC's technology is complementary to our product set of cost effective, high-performance connectivity solutions," said William B. Heye, Jr, president and CEO of SBE. "LMC's customer base, including Lucent, Nortel and Cisco, will provide us many exciting cross-selling opportunities. We are very pleased to welcome the addition of LMC's talented employees and management to the SBE team."
Ron Crane, President and Chief Executive Officer of LMC, said, "SBE is the ideal partner for LMC. SBE's base of customers, along with their focused sales and marketing resources, provides LMC with the opportunity to become a dominant supplier of wide area network connectivity solutions.''
LMC offers a broad range of high-performance, PCI-based WAN adapters to meet a variety of network connectivity requirements including DS3/T3, HSSI, T1/E1 Channelized and Clear Channel, and Serial Synchronous Interface (SSI). Products are available in multiple PCI form factors that include "Desktop" PCI, PCI Mezzanine Card (PMC), or CompactPCI (cPCI). LMC adapters include a variety of software drivers including Sun Solaris and those that operate within several open source operating system environments, such as Linux, NetBSD, FreeBSD, OpenBSD and BSD/OS.
LMC founders Ron Crane and David Boggs are the named inventors on numerous patents issued in the area of networking systems. Dr. Boggs is the co-inventor (along with Bob Metcalfe) of Ethernet. Ron Crane was part of the 3Com start-up team designing many of 3Com's transmission system products. He went on to become one of the founding members of the Fast Ethernet Alliance.
LMC will continue to operate from its existing facilities in Sunnyvale CA. Ron Crane, as SBE Vice President of WAN Engineering, will direct the ongoing development of new WAN connectivity technology.
Based in San Ramon, California, SBE designs and manufactures products to meet the needs of traditional and converged telecommunication markets. SBE products are designed for incorporation within carrier-grade computer systems and integrated into signaling, switching and routing networks. They include SS7/AIN controllers for switch manufacturers, WAN interface adapters for workstations and servers, and high-speed communications controllers for wireless and data messaging applications. For more information, visit SBE's web site at www.sbei.com.
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This news release contains certain forward-looking statements that involve risks and uncertainties, including statements about new product features, market opportunity for new products, and the demand for services that may be offered by SBE's customers. Such statements are only predictions and the company's actual results may differ materially from those anticipated in these forward-looking statements. Factors that may cause such differences include, but are not limited to risks related to rapidly changing product requirements, the introduction of new products, market acceptance of the Company's products, and reliance on strategic partners. These factors and others are more fully discussed in the documents the Company files from time to time with the Securities and Exchange Commission, specifically, the Company's most recent Form 10-K, Form 10-Q, and Form 10-Q/A.
SBE and the SBE logo are registered trademarks of SBE, Inc. LMC is a registered trademark of Lan Media Corporation. All other brand or product names are trademarks or registered trademarks of their respective holders.