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EXHIBIT 99.1
MEDIA INQUIRIES:
Lynn Newman
908-953-8692 (office)
973-993-8033 (home)
[email protected].
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Barbara Burgess
908-953-3348 (office)
201-400-1451 (mobile)
[email protected]
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INVESTOR INQUIRIES:
Derrick Vializ
908-953-7500 (office)
[email protected]
AVAYA AGREES TO ACQUIRE VPNET TECHNOLOGIES, INC.
COMPANY'S FIRST ACQUISITION STRENGTHENS DATA NETWORKING CAPABILITIES
FOR IMMEDIATE RELEASE: MONDAY, JANUARY 8, 2001
Basking Ridge, N.J. - Avaya Inc. today announced it has agreed to
acquire VPNet Technologies, Inc., a privately held developer of virtual private
network (VPN) solutions and devices for approximately $120 million in cash. The
acquisition broadens Avaya's presence in the rapidly growing market for data
networking solutions for enterprise customers.
Based in Milpitas, California and founded in 1995, VPNet Technologies
develops and markets high-performance VPN solutions to service providers and
enterprises. The company's scaleable VPNware(TM) Systems deliver the highest
levels of security, performance and manageability across a wide range of VPN
applications. Its VPNsure(SM) Managed Services Program enables service providers
and enterprises to outsource the implementation and management of their VPNs.
The VPNet products will complement Avaya's current offerings, giving customers a
wider choice of VPN solutions. Avaya's portfolio of data solutions includes
silicon-based gigabit ethernet local area network switches and routers, wireless
local area network solutions, multi-service wide area network switches, security
systems for enterprises, and policy management systems.
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"The addition of VPNet strengthens our capabilities in data
networking," said Don Peterson, president and CEO, Avaya. "VPNet's products and
services help customers take full advantage of the benefits from VPNs of
security, productivity and cost-effectiveness." The VPN equipment market is
expected to grow by a CAGR (compound annual growth rate) of 40 percent to $4.3
billion from 1999 through 2003, according to industry sources.
With a VPN, an enterprise can use the public network - including the
Internet - to make its communications network more flexible and cost effective
for voice and data communications with its branch offices and virtual office and
mobile employees. VPNs offer the security associated with a private network
combined with cost savings and the speed of deployment associated with the
public network.
VPNet has shipped more than 3,000 of its VPNwareTM Systems to customers
in 25 countries since the product was introduced in 1997. VPNet sells primarily
through value-added resellers, distributors, systems integrators and service
providers. Among the companies with which it works to deliver VPNs and VPN
services are IBM Global Services, SBC Communications, Equant Integration
Services, AT&T, CERFnet, NTT PC and XO Communications.
"VPNet's exclusive focus on VPNs for enterprises has allowed us to
become a leader in this fast-growing market," said James E. Patty, president and
CEO, VPNet Technologies. "We're excited to become part of Avaya and offer its
large base of enterprise customers a total VPN-managed solution, whether it is
for remote access, communications within an organization or communications with
other business partners. Like Avaya, VPNet offers customers the option of
managing their communications themselves or through our full-service outsourcing
capabilities." Patty will join Avaya as vice president, virtual private
networking.
VPNet employs about 130 people, most of whom work in Milpitas. The
company also has offices in Taipei, Taiwan and Fleet, Hampshire in the United
Kingdom. More than a third of its employees are involved in research and
development.
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The completion of the acquisition is subject to regulatory approval and
customary closing conditions and is expected to close in the quarter ending
March 31, 2001. Excluding in-process research and development (IPR&D) and the
amortization of goodwill, the acquisition is expected to have a $0.03 dilution
to Avaya's cash earnings in fiscal 2001. Including the amortization of goodwill
and IPR&D, the acquisition is expected to have a higher dilutive impact.
Avaya, headquartered in Basking Ridge, N.J., USA, is a leading provider
of communications systems for enterprises, including businesses, government
agencies and other organizations. Avaya offers converged voice and data,
customer relationship management, messaging, voice multi-service networking and
structured cabling products and services. Avaya is a worldwide leader in sales
of messaging and structured cabling systems and a U.S. leader in sales of
enterprise voice communications and call center systems. Avaya intends to use
its leadership positions in enterprise communications systems and software, its
broad portfolio of products and services, and strategic alliances with other
technology and consulting services leaders to offer its customers comprehensive
eBusiness solutions. For more information about Avaya, visit its Web site at
HTTP://WWW.AVAYA.COM.
This news release contains forward-looking statements based on current
expectations, forecasts and assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially. These
forward-looking statements include, but are not limited to, future products,
market and technology development, future benefits of the merger, estimated date
to complete the transaction, and the expected impact of the transaction on
future earnings. These risks and uncertainties include VPN Technologies, Inc.'s
stockholder approval, obtaining regulatory approvals and clearances, price and
product competition, dependence on new product development, reliance on major
customers, customer demand for our products and services, the ability to
successfully integrate acquired companies, control of costs and expenses,
international growth, general industry and market conditions, growth rates and
general domestic and international economic conditions, including interest rate
and currency exchange rate fluctuations. For a further list and description of
such risks and uncertainties, see the reports filed by Avaya with the Securities
and Exchange Commission (SEC). Avaya disclaims any intention or obligation to
update or revise any forward-looking statements, whether as a result of new
information, future events or otherwise.
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