Thursday August 31, 2000
Press Release
CYLINK CORPORATION COMPLETES ACQUISITION OF CELOTEK CORPORATION
Purchase to Expand Cylink's ATM Security Product Engineering, Manufacturing, and
Marketing Capabilities
SANTA CLARA, Calif., August 31, 2000 - Cylink Corporation (NASDAQ:
CYLK) has completed its previously announced acquisition of Celotek Corporation,
a privately held developer of high-performance Asynchronous Transfer Mode (ATM)
network security appliances used to secure voice, video and data transmissions
over high-speed public and private wide area networks. Celotek has supplied the
ATM encryption appliances that Cylink, under private label, sells to Fortune 500
companies, government agencies, and major financial organizations around the
world.
According to a formula set at the time of the definitive agreement,
Cylink issued 1,610,545 shares of its common stock, representing a transaction
value of $21.5 million, less certain expenses, for all privately held Celotek
shares. The transaction, being treated as a purchase for accounting purposes, is
expected to be dilutive to third quarter, 2000 results but is expected to begin
positive contributions to operating results in the fourth quarter of 2000.
The former Celotek Corporation, headquartered in the Research Triangle
Park area of North Carolina, now becomes the Cylink ATM Technology Center,
dedicated to continuing Cylink's leadership in developing ATM security
applications and products. With this important capability, Cylink expects to
continue current and future OEM and strategic partnerships involving ATM
security. Mel Snyder, former Vice President Operations for Celotek, was named
General Manager of the new ATM Technology Center.
"Acquiring Celotek, its people, technology and channels is of great
strategic importance to Cylink's customers and shareholders," said William P.
Crowell, Cylink's president and chief executive officer.
"As the primary means for mission critical backbone communications, ATM
continues to grow rapidly among our customers, which include banks, financial
institutions, service providers, and other large enterprises.
"Cylink is now in an even better position to provide a variety of
security solutions to protect information transmitted over ATM backbones and
significantly reduce the risk to this crucial business information," Crowell
said.
About Cylink Corporation
Cylink Corporation develops, markets and supports a comprehensive
family of secure e-business solutions. Founded in 1983, the Company was the
first created to market security solutions that protect communications with
public key cryptography. Cylink and its wholly owned subsidiaries
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serve Fortune 500 companies, multinational financial institutions, and
government agencies worldwide. For more information, visit the Company's web
site at http://www.cylink.com.
Some of the matters discussed in this release are forward-looking
statements that involve risks and uncertainties, and actual results could be
materially different. Forward-looking statements include the expectation that
the acquisition will result in positive contributions to operating results in
the future, that Cylink will continue the leadership of developing ATM security
applications and products, that Cylink will continue to be involved in OEM and
strategic partnerships involving ATM security, that the popularity or importance
of the ATM technology will continue to grow, and that Cylink's position in the
ATM business will be improved. Factors that could cause actual results to differ
include but are not limited to market factors, such as unforeseen variations in
the market for ATM technology, pricing pressures, costs of production, or market
acceptance; technical factors, such as success in future product development or
the emergence of alternative technologies; risks associated with the
acquisition, such as Cylink's ability to retain and integrate the Celotek
engineering team, Cylink's ability to manage the costs of integrating the
acquired company and potential unforeseen liabilities associated with the
acquisition; competitive factors, including the entry of large, well-capitalized
companies. This list is not intended to be exhaustive; other risks associated
with Cylink's are listed from time to time in the company's SEC reports,
including but not limited to the report on Form 10-K and the Annual Report to
shareholders for the year ended December 31, 1999 and its reports on Forms 10-Q.
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