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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):
September 15, 1999
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VISUAL NETWORKS, INC.
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(Exact name of registrant as specified in its charter)
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Delaware 000-23699 52-1837515
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(State of Incorporation) (Commission File Number) (IRS Employer Identification No.)
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2092 Gaither Road
Rockville, Maryland 20850
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(Address of principal executive offices) (Zip Code)
(301) 296-2300
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(Registrant's telephone number)
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ITEM 5. OTHER EVENTS.
On September 15, 1999, Visual Networks, Inc. ("Visual"), Inverse
Network Technology ("Inverse") and Visual Acquisitions Two, Inc. ("Merger Sub")
entered into an Agreement and Plan of Merger dated as of September 15, 1999 (the
"Merger Agreement"), pursuant to which Merger Sub will merge with and into
Inverse (the "Merger").
Under the terms of the Merger Agreement, all outstanding shares of
Inverse capital stock and all shares of Inverse common stock reserved for
issuance upon the exercise of all outstanding Inverse warrants will be exchanged
for shares of Visual common stock representing 19.99% of the outstanding shares
of Visual common stock as of the closing date of the Merger. In addition, all
outstanding Inverse stock options and warrants will be assumed by Visual. Upon
the consummation of the Merger, Inverse will become a wholly-owned subsidiary of
Visual. The transaction will be accounted for as a pooling of interests. The
Merger is intended to qualify, for federal income tax purposes, as a tax-free
reorganization. The Merger is subject to customary closing conditions and the
approval of the shareholders of Inverse.
Visual issued a press release announcing the Merger on September 15,
1999, which is filed herewith as Exhibit 99.1 and is incorporated herein by
reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(c) Exhibits.
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99.1 Press release of Visual Networks, Inc., dated September 15, 1999.
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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.
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Date: September 20, 1999 Visual Networks, Inc.
/s/ Peter J. Minihane
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By: Peter J. Minihane
Title: Chief Financial Officer
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EXHIBIT INDEX
99.1 Press release of Visual Networks, Inc., dated September 15, 1999.
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PRESS RELEASE
For Immediate Release
Contact:
For Visual Networks:
Sheryl Shultz
SRS Associates
(508) 647-0044
[email protected]
For Inverse Networks:
Chris Roeckl
(408) 616-6284
[email protected]
Pager (during Networld+Interop only):
(800) 604-1383
VISUAL NETWORKS TO ACQUIRE INVERSE NETWORK TECHNOLOGY
Combined company dominates the delivery of reliability behind public data
networks and the Internet
September 15, 1999 - Rockville, MD - Visual Networks, Inc., the leader in
service management solutions for public data networks, today announced it has
reached a definitive agreement to acquire Inverse Network Technology Inc., the
leader in service management solutions for IP services and the Internet. With
the acquisition, Visual Networks will offer the broadest set of WAN service
management solutions for service providers and their subscribers. The new
company combines its technology portfolio and distribution channels to address
the reliability requirements of today's IP, Frame Relay and ATM networks as well
as tomorrow's broadband and application service offerings.
Under terms of the acquisition agreement, Visual Networks issues its common
stock to acquire Inverse Network Technology. Based on the September 14, 1999
closing price of Visual Networks' common stock, the transaction is valued at
approximately $177 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 companies Boards
of Directors and is expected to close within approximately 15 days, subject to
approval of Inverse Network Technology stockholders, and other customary closing
conditions.
Visual Networks' customers are beginning to leverage the Internet for IP-centric
services such as remote access, virtual private networks (VPNs), and application
hosting. As this trend continues, network managers and operators must ensure
reliability to use these services in support of mission critical applications.
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"Next generation network services will become a reality only if service
providers can ensure service reliability," said Scott Stouffer, president and
CEO of Visual Networks, based here. "With Inverse, Visual is uniquely capable of
enabling both providers and their customers to take advantage of every service
from mainstream data services to leading-edge network and application services
based on DSL, cable, VPNs and beyond."
"Our customers are demanding a single, comprehensive service management solution
that spans their primary service offerings - IP, Frame Relay and ATM," said
Michael Watters, president and CEO of Inverse, Sunnyvale, Calif. "Combining
forces with Visual accelerates our time to market and creates a powerful
competitive advantage."
In addition to Inverse's IP technology, Visual gains expanded distribution
coverage to include leading Internet service providers, both domestically and
internationally. The deal also expands Visual Networks' product offerings to
include customer care (help desk) centers for IP services, such as remote-access
and VPNs, and IP application management.
The Need for Reliability and Service Management Solutions
Service providers need service management systems to attract and retain
customers as well as to lower the costs associated with supporting network
services. Business subscribers require highly reliable services to support their
mission-critical applications. Maximum reliability can only be achieved by
managing WAN services from an end-to-end perspective.
Visual UpTime manages the end-to-end performance of frame relay and ATM services
and automates the collection, interpretation and presentation of management
information for service providers and their subscribers. Similarly, Inverse's IP
InSight manages IP network and application services on an end-to-end basis.
Through the integration of Visual and Inverse solutions, customers will be able
to define and measure end-to-end performance of a broad set of WAN services,
sectionalize performance between a service provider and enterprise network and
sectionalize network and application performance. The end result is maximum
service reliability and lower cost of operations.
"Visual UpTime and IP InSight form the foundation of Visual Networks' Service
Reliability Architecture, the company's initiative to combine best-of-breed
fault and performance management solutions," Stouffer said. "Our two companies
have been working closely on this and we are now even better able to take
advantage of these synergies."
The Inverse Organization
Founded in 1996, Inverse Network Technology is the leading provider of software
solutions and measurement services that allow service providers and their
business customers to manage
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service quality for IP/Internet services such as remote access outsourcing,
virtual private networks (VPNs) and electronic commerce.
The Inverse organization will be functionally integrated into Visual Networks'
organization and Inverse's Silicon Valley presence will be maintained. Michael
Watters will become the Chief Operating Officer for Visual Networks, reporting
to Stouffer. No workforce reductions are expected at either Visual or Inverse.
For more information, call 408-616-6200 or visit the Inverse Web site at
http://www.inversenet.com/.
About Visual Networks
Visual Networks, Inc. (NASDAQ: VNWK) designs, manufactures and sells WAN service
management systems for packetized technologies such as frame relay, IP/Internet,
and ATM. Visual Networks' Visual UpTime system combines WAN access functionality
with innovative software for performance monitoring, troubleshooting and network
planning. Visual UpTime instruments the network for performance measurement and
analysis that allows WAN service providers to achieve service levels required by
subscribers and to lower operating costs associated with packetized WAN
services. Visual Networks is headquartered in Rockville, Maryland, with sales
offices nationwide.
Editor's note: Visual Networks will hold a conference call for analysts,
investors and the press on Sept. 15, 1999, at 6:30 p.m. (EDT). The call in
number is 800-289-0437. A replay of the conference call will be available at
9:30 p.m. (EDT) on Sept. 15, 1999, through Sept. 22, 1999. To access the replay,
please call 888-203-1112 (confirmation number: 779121) or visit the investor
relations section of our web site at www.visualnetworks.com.
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 obligation 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 upon 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 upon 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
Registration Statement on Form S-3 dated March 2, 1999, its Form 10-Qs and its
Annual Report on Form 10-K.
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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.
