SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 15, 1998
VISUAL NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-23699 52-1837515
(State of Incorporation) (Commission File Number)
(IRS Employer Identification No.)
2092 Gaither Road
Rockville, Maryland 20850
(Address of principal executive offices) (Zip Code)
(301) 296-2300
(Registrant's telephone number)
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Item 5. Other Events.
On April 16, 1998, Visual Networks, Inc. ("Visual") and Net2Net
Corporation ("Net2Net") announced that they have entered into an Agreement and
Plan of Merger dated as of April 15, 1998 (the "Merger Agreement"), pursuant to
which Visual Acquisitions, Inc., a wholly-owned subsidiary of Visual, will merge
with and into Net2Net (the "Merger").
Under the terms of the Merger Agreement, all outstanding shares of
Net2Net capital stock and all shares of Net2Net common stock reserved for
issuance upon the exercise of all outstanding Net2Net options and warrants will
be exchanged for an aggregate of 2,250,000 shares of Visual common stock. In
addition, outstanding Net2Net stock options will be assumed by Visual (adjusted
for the exchange ratio). Finally, upon the consummation of the Merger, Net2Net
will become a wholly-owned subsidiary of Visual. The transaction will be
accounted for as a pooling of interests. The Merger, which is expected to be
consummated in May 1998, is subject to customary closing conditions and the
approval of the shareholders of Net2Net.
Visual issued a press release announcing the Merger on April 16, 1998,
which is filed herewith as Exhibit 99.1 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Press release of Visual Networks, Inc., dated April 16, 1998.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: April 20, 1998 Visual Networks, Inc.
s/ Scott E. Stouffer
By: Scott E. Stouffer
Title: President and Chief Executive Officer
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EXHIBIT INDEX
99.1 Press release of Visual Networks, Inc., dated April 16, 1998.
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EXHIBIT 99.1 PRESS RELEASE
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FOR RELEASE AT 7:00 A.M. EDT, APRIL 16, 1998
CONTACT:
Dan Davie Angela Tandy
Press Liaison Investor Liaison
Visual Networks, Inc. Visual Networks, Inc.
301/296-2273 301/296-2394
[email protected] [email protected]
VISUAL NETWORKS, INC. TO ACQUIRE NET2NET CORPORATION
Acquisition Provides Best of Breed Technologies
For Managing High-Speed ATM Services.
Rockville, MD - April 16, 1998 - Visual Networks, Inc. a leading provider of WAN
service level management systems, announces today the execution of a definitive
agreement to acquire Net2Net Corporation, a leading provider of ATM analysis and
management systems. This strategic acquisition combines Visual Networks' Visual
UpTime, the predominant service level management system for frame relay and IP
networks, with Net2Net's leading high-speed ATM management and analysis
platform. The combination of the two product offerings will allow Visual
Networks to provide its customers with a single-vendor solution for end-to-end
service level management, encompassing frame relay, IP, and ATM at speeds
ranging from 56Kbps up to OC-3, both at the service demarcation and in the core
backbone.
Under terms of the acquisition agreement, Visual Networks issues 2.25 million
shares of Visual Networks' common stock to acquire Net2Net. Based on the April
15, 1998 closing price of Visual Networks' common stock, the transaction is
valued at approximately $70 million. The transaction is to be accounted for as a
pooling of interests and is to be treated as a tax-free reorganization for
federal income tax purposes. The transaction has been approved by both company's
Boards of Directors and is expected to close within approximately 60 days,
subject to approval of Net2Net stockholders, and other customary closing
conditions.
"We've been having joint development and OEM discussions with Net2Net with a
plan of integrating their market leading technology into the Visual UpTime
system for ATM environments. Over time, it became clear that putting the two
companies together made the most sense," said Scott Stouffer, President and CEO
of Visual Networks. "This acquisition allows us to accelerate the expansion of
our product portfolio, and to strengthen our position as the leading provider of
service level management infrastructure for public data services."
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Visual Networks To Acquire Net2Net page two
He continued, "In addition to serving the same service provider customer base,
both companies have the same business mission, namely, lowering the cost and
improving the quality and scalability of public data services. Both companies
are focused on changing the model by which these data services are deployed by
delivering solutions that enable service providers to define, measure, and
cost-effectively achieve service performance levels that meet or exceed the
business requirements of their customers. From both a business and a product
perspective, the two companies are a strong strategic fit, and the two companies
have strong cultural synergy."
"By integrating Net2Net's ATM analysis platform into the sophisticated system
architecture of Visual UpTime, customers will now have a clear view of
end-to-end performance across a mixed ATM/frame relay network," said Stephen
McCalmont, President and CEO of Net2Net. "I think we will find that this
capability, coupled with the premier reputation of both our companies, will
provide a significant comfort level with both public data service providers and
their subscribers in implementing the new Visual Networks' solutions."
The Net2Net organization will be functionally integrated into Visual Networks'
organization and those employees will continue to work out of the Hudson,
Massachusetts facilities. Significantly, Net2Net's sales organization will
become the OEM and Broadband Sales Operations Group for Visual Networks. Mr.
McCalmont assumes the role of Vice President of that group, reporting directly
to Mr. Stouffer. Additionally, Net2Net's product development group will become
the Broadband Technologies Group for Visual Networks, reporting to Jay Ennis,
Visual Networks' Vice President of Engineering.
"I'm particularly excited to have this engineering group as part of our
organization," said Mr. Ennis. "These people are widely recognized as some of
the best and brightest talent in the industry. Also, by having this engineering
base in the Hudson facilities, Visual Networks will more easily be able to
attract outstanding new talent from the high-tech Boston area."
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Visual Networks To Acquire Net2Net page three
About Visual Networks
Visual Networks, Inc. (NASDAQ: VNWK) designs, manufactures, and sells WAN
service level management systems for statistically multiplexed technologies such
as frame relay and IP/Internet. Visual Networks' Visual UpTime system combines
WAN access functionality with innovative software for performance monitoring,
troubleshooting, and network planning. Visual UpTime provides instrumentation
for network performance measurement and analysis that allows WAN service
providers to achieve service levels required by subscribers and to lower
operating costs associated with statistically multiplexed services. Visual
Networks is headquartered in Rockville, Maryland, with sales offices nationwide.
For more information about Visual Networks and Visual UpTime, contact Visual
Networks, Inc., 2092 Gaither Road, Rockville, Maryland 20850, at (800) 240-4010,
or via the World Wide Web at http://www.visualnetworks.com.
About Net2Net Corporation
Based in Hudson, Massachusetts, Net2Net is a leading provider of ATM analysis
and management systems. The company's award-winning family of CellBlaster
products are designed to help ATM equipment developers, service providers, and
large end users install and troubleshoot ATM networks as they are deployed, and
maintain those networks once operational. Net2Net sells its products globally,
through a network of channel-focused partners, distributors, and manufacturers
reps.
This press release may contain forward-looking information within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and is subject to the safe harbor created by those
sections. Visual Networks assumes no obligations to update the information
contained in this press release. Visual Networks' future results may be impacted
by its ability to implement its provider deployment model, its lengthy sales
cycle, dependence on its major customers, risks associated with rapid
technological change and the emerging services market, potential fluctuations in
its quarterly operating results, its dependence on sole and limited source
suppliers and fluctuations in component pricing and its dependence on key
employees. Visual Networks' future results may be impacted by other risk factors
listed from time to time in its SEC reports, including, but not limited to, the
Company's prospectus dated February 5, 1988, and its Annual Report on Form 10K.
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