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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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): June 20, 2000
VIRATA CORPORATION
(Exact Name Of Registrant As Specified In Its Charter)
DELAWARE 000-28157 77-0521696
(State Or Other Jurisdiction Of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
2933 BUNKER HILL LANE, SUITE 201
SANTA CLARA, CALIFORNIA 95054
(Address Of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (408) 566-1000
Item 5. Other Events.
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A. Acquisition of Excess Bandwidth
On June 20, 2000, Virata Corporation, a Delaware corporation ("Virata" or
"Registrant"), entered into an Agreement and Plan of Merger with Excess
Bandwidth Corporation, a California corporation ("Excess Bandwidth"). Virata
believes that the acquisition will provide it with symmetric DSL PHY
capabilities targeted at the markets for both business premises and central
office equipment. Excess Bandwidth develops advanced algorithms for high-
bandwidth communications applications and implements those algorithms as
communications processors. Excess Bandwidth is presently testing its first two
integrated circuit designs and has not yet shipped product to customers. Excess
Bandwidth has 50 employees, including 40 physical layer and analog designers,
and was founded in 1998 by Dr. Debajyoti Pal and Stanford Professor Thomas
Kailath.
The merger agreement sets forth the terms and conditions of the merger of a
wholly owned subsidiary of Registrant with and into Excess Bandwidth. Upon
consummation of the proposed acquisition, Excess Bandwidth will become a wholly
owned subsidiary of Registrant. Registrant will issue 6,302,363 shares of its
common stock for all of Excess Bandwidth's issued and outstanding shares of
capital stock and options and warrants to purchase shares of capital stock. Ten
percent of the shares of the shares of Virata common stock to be issued pursuant
to the acquisition will be placed in an escrow. Consummation of the merger is
subject to a number of customary conditions, including the approval of the
merger by the shareholders of Excess Bandwidth, compliance with all applicable
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the
expiration or termination of all applicable waiting periods. Affiliates of
Excess Bandwidth holding more than 50% of Excess Bandwidth's common stock and
preferred stock have agreed to vote in favor of the merger. The merger is
expected to close in the third quarter of calendar 2000, will be accounted for
as a purchase and will result in a charge related to the write-off of in-process
research and development.
Registrant's common stock will be issued to the shareholders of Excess Bandwidth
pursuant to a permit from the California Department of Corporation after a
fairness hearing and as a consequence may be resold by them without registration
under the Securities Act. The holders of Excess Bandwidth common and preferred
stock have agreed to restrict their sales of Registrant's common stock during
the first year after the closing of the merger. Holders of Excess Bandwidth
preferred stock, who will receive an aggregate of 2,773,250 shares of Virata
common stock, may sell 15% of their Virata common stock each quarter beginning
90 days after the completion of the offering of common stock hereunder. Holders
of Excess Bandwidth common stock, who will receive an aggregate of 3,125,040
shares of Virata common stock, may sell 15% of their Virata common stock
beginning 90 days after completion of this offering and may sell their remaining
shares one year after the closing date of the merger.
B. Expected First Quarter Revenues
On June 20, 2000 Registrant announced that its fiscal 2001 first quarter
revenues for the period ended July 2, 2000 is expected to be approximately $25-
27 million, which represents an average 115 percent increase from the prior
quarter's $12 million in revenues. Registrant had not expected to attain such
amount of revenues until its fiscal 2001 second quarter. In addition,
Registrant expects to ship 3 times more communications processors for the first
quarter compared to the prior quarter, including its millionth Helium
processor. Registrant expects to announce complete first quarter 2001 results
on July 25, 2000.
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Item 7. Financial Statements, Pro Forma and Exhibits.
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(c) Exhibits
Exhibit No. Description
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2.1 Agreement and Plan of Merger Dated as of June 20, 2000
among Virata Corporation, Excess Bandwidth Corporation, VC
Acquisition, Inc., and Steve Dines, as Securityholder Agent
99.1 Press Release issued June 21, 2000
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Signature
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 hereunto duly authorized.
Dated as of June 22, 2000
VIRATA CORPORATION
By: /s/ Andrew M. Vought
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Andrew Vought
Chief Financial Officer
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EXHIBIT INDEX
Sequentially
Numbered
Exhibit No. Description Page
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2.1 Agreement and Plan of Merger Dated as of
June 20, 2000 among Virata Corporation, Excess
Bandwidth Corporation, VC Acquisition, Inc.,
and Steve Dines, as Securityholder Agent.
99.1 Press Release issued June 21, 2000.
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