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EXHIBIT 99.1
VIRATA TO ACQUIRE EXCESS BANDWIDTH CORPORATION TO
BECOME THE ONLY COMPANY OFFERING COMPLETE
SOLUTIONS FOR BOTH ASYMMETRIC AND SYMMETRIC DSL
FOR IMMEDIATE RELEASE
Excess Bandwidth's DSL Technologies Enable Virata to Enter the
Fast Growing Market for SDSL, HDSL2 and G.shdsl Products
SANTA CLARA, Calif., June 21, 2000 - Virata Corporation (Nasdaq: VRTA) today
announced it has signed a definitive agreement to acquire privately held
Excess Bandwidth Corporation in exchange for approximately 6.3 million shares
of Virata common stock, valued at approximately $315 million based on Virata's
closing price on June 20. The transaction is expected to provide Virata with
symmetric DSL physical layer capabilities targeted at the high-growth markets
for both business premises and central office equipment.
"Today's announcement is an important strategic move by Virata as it further
enhances our growing arsenal of DSL solutions to offer our customers both
asymmetric and symmetric solutions," said Charles Cotton, chief executive
officer of Virata Corporation. "Excess Bandwidth's products will enable us to
compete in the symmetrical market, which is expected to grow very rapidly.
Virata will be well positioned as the only company in the world that can
provide the major building blocks for manufacturers targeting customer
premises or central office DSL equipment -- including communications
processors, voice processors, integrated software, and ADSL and symmetric DSL
physical layer solutions."
Commented Steve Dines, president and chief executive officer of Excess
Bandwidth "We believe that Virata's business model of combining semiconductors
and software to deliver the two key technologies required by
telecommunications equipment companies is a winning strategy as it
significantly accelerates their time to market. Our symmetric DSL PHY
technology, combined with Virata's communications and voice processors and
software, will deliver the perfect solution for equipment customers designing
high-performance, cost effective symmetric DSL solutions. We are looking
forward to being part of the Virata team and to playing a significant role in
the development and success of the combined enterprise."
Added Cotton, "These new integrated symmetric DSL products will deliver the
traditional Virata benefits of significantly lower equipment costs, rapid time
to market, and cutting edge performance and functionality."
The Symmetric DSL Market Opportunity
In symmetric DSL implementations, such as SDSL, HDSL-2, and G.shdsl, the
upstream and downstream data rates are equal, making these DSLs most suitable
for medium-sized or large offices in which the transfer requirements from
network to user and user to network are more equal than in the consumer or
smaller office application. Following is a brief description of the different
symmetric DSL technologies:
. SDSL - operates on one pair of copper wires to deliver 1/2 T1 rates or
~ 768 Kbps in both directions and is typically limited in reach to
6000 ft.
. HDSL-2 - designed to support full T1 rates ~1.5 Mbps in both
directions on one pair of copper wires.
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. G.shdsl - rate-adaptive 192Kbps to 2.3 Mbps, trades-off slower
speed of transmission for longer reach.
ADSL is an asymmetric format offering downstream - central office to customer -
data rates up to 8 Mbps and upstream rates from 64Kbps to 800 Kbps. ADSL has
been extremely successful in the residential and small business markets, where
high-speed bandwidth is mostly required from the network to the user.
The transaction is subject to customary closing conditions and is expected to
close in the third calendar quarter. The transaction will be accounted for as
a purchase and will result in a charge related to the write-off of in-process
research and development.
About Excess Bandwidth
Excess Bandwidth Corporation was founded in 1998 by Dr. Debajyoti Pal and
Stanford Professor Thomas Kailath. The company develops advanced algorithms
for high-bandwidth communications applications and implements those algorithms
as integrated circuits. The company's efforts have been focused throughout on
symmetric DSL.
Excess Bandwidth is located in Cupertino, California and currently has 50
employees, including approximately 40 physical layer and analog designers with
complete VLSI development. The company will continue to operate out of its
Cupertino office.
About Virata
Virata Corporation provides communications processors combined with integrated
software modules to manufacturers of equipment utilizing digital subscriber
line (DSL) technologies. These "integrated software on silicon" product
solutions enable customers to develop a diverse range of broadband wireless
and DSL equipment including modems, gateways, routers, and integrated access
devices targeted at the voice and high-speed data network access market.
Virata's products are designed to enable DSL equipment manufacturers to
simplify product development, reduce the time it takes for products to reach
the market and focus resources on product differentiation and improvement.
Virata is a principal member of the ATM Forum, DSL Forum, MPLS Forum, uPNP
Forum, HomePNA, ITU and the official Bluetooth SIG organization. A publicly
traded company on the Nasdaq stock exchange, Virata was founded in 1993 and is
headquartered in Santa Clara, California.
Virata is a registered trademark of Virata Corporation. All other trade,
product, or service names referenced in this release may be trademarks or
registered trademarks of their respective holders.
Except for historical information contained herein, this press release
contains forward-looking statements that involve risks and uncertainties.
Actual results may differ materially. Factors that might cause a difference
include, but are not limited to, those relating to evolving industry
standards, the pace of development and market acceptance of Virata's products
and the DSL market generally, commercialization and technological delays or
difficulties, the impact of competitive products and technologies, competitive
pricing pressures, manufacturing risks, the possibility of our products
infringing patents and other intellectual property of third parties, product
defects, costs of product development, the company's ability to complete the
acquisition in the time period outlined, or at all, and extract value from the
acquisition, and manufacturing and government regulation. Virata will not
update these forward-looking statements to reflect events or circumstances
after the date hereof. More detailed information about potential factors that
could affect Virata's financial results is included in the documents Virata
files from time to time with the Securities and Exchange Commission.
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Media Contacts:
Kelly Morris
Virata
408-566-1026
[email protected]
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Desiree Russell
Virata
919-790-9189, ext. 3336
[email protected]
