Acquisition Expands Access Offerings Portfolio and Adds Tier-1 Carrier Customers
ATLANTA (BUSINESS WIRE) –
Jan. 4, 2007 -Verso Technologies, Inc.
(Nasdaq: VRSO), a global provider of next generation network solutions, announced today that it
acquired the iMarc product line from Paradyne Networks, Inc., a subsidiary of
Zhone Technologies, Inc., on December 29, 2006.
The iMarc product line is closely aligned with the Verso portfolio and
distribution model, which Verso recently expanded as a result of the June 2006
acquisition of the assets of Verilink Corporation. In particular, the iMarc
product line strengthens Verso's access offerings, substantially expands its
Tier-1 customer base, and is complementary to the Verso Verilink WanSuite®
product line. Prior to the acquisition of the iMarc product line, Verso served
as a reseller of Zhone products and therefore has strong existing knowledge of
the products and market, and long-term relationships with relevant senior
management.
The iMarc product line is a family of asynchronous transfer mode (ATM), IP
service units, and branch monitors. The product line provides intelligent
demarcation between carrier and enterprise networks, allowing for easier
management. Specifically, it offers service level management products and
services, end-to-end network monitoring, and the greatest degree of application
and service monitoring in the industry. This provides carriers the critical
ability to monitor and manage compliance of Service Level Agreements (SLAs) to
enterprise customers, which ensures that Quality of Service (QoS) is delivered.
As a result, iMarc solutions enable new services to be deployed faster, existing
services to remain reliable, and inactive services to be restored more
quickly.
"As carriers began transitioning bandwidth to packet-based transmission, they
realized they no longer retained the same monitoring and delivery control
mechanisms to deliver the level of SLA capabilities that their enterprise
customers enjoy today. The new version of the iMarc technology, which is
expected to be released in the second quarter of 2007, will fill this void in
the carrier market. A significant portion of the currently installed iMarc
product market base that provides these capabilities for traditional telephony
can be upgraded to the new firmware for a smooth migration to a fully converged
packet-based solution," said Steven A. Odom, executive chairman, Verso
Technologies. "Additionally, with this acquisition, Verso can now count among
its customers the two largest carrier customers in the world, one of whom we
believe will be commencing a major VoIP initiative in 2007 for which the iMarc
product is well suited. The iMarc product line will also give us the opportunity
to re-engage other major Verso carrier customers who can offer the iMarc
products to their enterprise customers."
"Verso is well equipped to capitalize on this acquisition, with a
complementary distribution model and product portfolio. With the combined iMarc
and Verso Verilink WANSuite portfolio, Verso has one of the strongest offerings
in the access space. We plan to leverage our Huntsville, Alabama and Montreal
facilities, consolidating product engineering and sales and reducing costs.
Overall, this is a synergistic and strategic move for Verso that offers strong
cash flow and opportunities for additional revenue expansion," said Jim Nevelle,
senior vice president of operations, Verso Technologies.
In payment of the purchase price for this acquisition, Verso paid $1.0
million at closing on December 29, 2006 and will pay an additional $1.5 million
on January 19, 2007 (at which time Zhone will transfer to Verso the intellectual
property associated with the iMarc product line which is being licensed to Verso
pending the January payment). In addition, Zhone will provide contract
manufacturing services to Verso for a period of up to six months following the
closing and, upon the conclusion of those services, Verso will then purchase
from Zhone the inventory relating to the iMarc product line for an additional
purchase price equal to the value of such inventory. Verso utilized borrowing
availability under its $14.0 million credit facility with its primary lender to
fund the $1.0 million paid at closing.
"We are pleased that Verso has chosen to include iMarc products in its family
of telecommunications products," said Mory Ejabat, chairman and chief executive
officer of Zhone. "With this transaction, our customers benefit from continued
sales of these products as well as from Verso's experience in servicing these
types of products."
About Verso Technologies
Verso is a global provider of next generation network solutions offering a
core-to-edge product portfolio primarily for telecommunications service
providers. The company's products enable its customers to secure and optimize
network bandwidth, generate additional revenue, and reduce costs. Verso's
applications and services are cost-effective, deploy quickly, and provide a
superior return on investment. For more information, contact Verso at www.verso.com or call 678.589.3500.
About Zhone Technologies
Zhone Technologies, Inc. (Nasdaq: ZHNE) is a global provider of advanced
communications equipment to more than 600 operators in both emerging and
established markets. Zhone's market-leading Broadband Loop Carrier equipment
enables operators to rapidly deploy revenue-generating access services using
their existing infrastructure, while providing a migration path to a
cost-efficient, all-IP access network. The company's products address a broad
range of applications including residential and business broadband, VoIP, IPTV,
and Ethernet over both copper and fiber access lines. Zhone's advanced networking solutions include
the Single Line Multi-Service architecture (SLMS)(TM), Multi-Access Line
Concentrator (MALC)(TM), Raptor(TM) ATM/IP DSLAMs, Zhone Residential Gateways
(ZRG)(TM), GigaMux(TM) Optical Transport Systems and Zhone Management System
(ZMS)(TM). For more information, please visit Zhone.
CONTACT:
Verso Technologies, Inc., Atlanta
Investor Contact:
Steven A. Odom, 678-589-3710
Executive Chairman
steve.odom@verso.com
SOURCE: Verso Technologies, Inc.
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