EXHIBIT 99.1
SYMBOL TO ACQUIRE TELXON IN A STOCK-FOR-STOCK TRANSACTION;
WILL CREATE A GLOBAL LEADER IN WIRELESS HANDHELD COMPUTING
ACROSS MANY INDUSTRIES
HOLTSVILLE, N.Y. & CINCINNATI--(BUSINESS WIRE)--July 26, 2000-
Symbol Technologies, Inc. (NYSE: SBL) and Telxon Corporation (NASDAQ:
TLXN) today announced that Symbol will acquire Telxon in a stock-for-stock
merger that will create a global leader in wireless handheld computing systems
across many industries and vertical applications.
Under the terms of a definitive merger agreement unanimously approved by
both Boards of Directors, Telxon shareholders will receive 0.50 of a Symbol
share for each Telxon share. The transaction has a total equity value of
approximately $465 million based on Symbol's closing share price yesterday
of $49.88. Telxon also has $107 million in convertible debt. The
acquisition is expected to be accounted for as a purchase and to be
tax-free to Telxon shareholders.
The acquisition is expected to result in substantial initial operating
efficiencies of at least $75 million annually from eliminating duplicate
functions, rationalizing manufacturing facilities and sales offices and
realizing purchasing, sales, manufacturing and other efficiencies. All
aspects of Telxon's business will be fully integrated into Symbol. Before
one-time transaction costs, the acquisition is expected to be approximately
neutral to Symbol's earnings per share in 2001 and significantly accretive
thereafter as the substantial synergies are realized. The transaction is
expected to be completed in the fourth quarter of 2000 and is subject to
regulatory clearance, approval by Telxon's shareholders and customary
closing conditions.
Telxon had revenues of $363 million in the last 12 months and holds 4.1
million shares of Cisco Systems (NASDAQ: CSCO) with a current pre-tax value
of approximately $283 million. Upon completion of the acquisition, Symbol
will have estimated pro forma 2000 revenues of approximately $1.8 billion.
Symbol shareholders will own over 90% of the combined company.
"Under John Paxton's leadership, Telxon has made great progress in
stabilizing its operations," said Tomo Razmilovic, Symbol's President and
CEO. "We are very excited about the future prospects of the combined
company, its complementary technology, product lines, customer bases and
network of partnerships. The transaction is financially as well as
strategically compelling for Symbol, based on the substantial synergies we
believe that we can achieve and the significant value of the Cisco shares
owned by Telxon."
"Acquiring Telxon is a unique opportunity to combine our two companies'
resources to develop and bring to market mobile computing systems and
wireless data networks that enhance productivity and reduce costs across a
wide range of industries and vertical applications," said Jerome Swartz,
Symbol's Chairman. "As the Information Technology and Communications
industries rapidly converge, Symbol and Telxon's complementary strengths
will allow us to do more for our combined customers around the world than
either company could have done separately."
John W. Paxton. Sr., Telxon's Chairman and CEO said, "This strategic
combination makes sense for both companies, and I firmly believe it is the
right step at the right time for Telxon's customers and shareholders. Our
customers will benefit from greater resources and economies of scale, and
our shareholders will benefit from a significant current premium and the
opportunity to participate in the upside of this compelling combination."
Symbol's current management team will lead the combined company and Paxton
will assist in the integration.
Added Razmilovic, "We will keep a sharp focus on customers as we fully and
completely integrate Telxon into Symbol. We are committed to seamless
convergence of existing Symbol and Telxon products, systems and sales
forces and to providing unparalleled customer service and support. We plan
no interruptions in any scheduled or committed rollouts from either
company, and we intend to support all existing Symbol and Telxon products
and services. We intend to honor all existing agreements with customers,
VARs, distributors, OEMs and other strategic partners."
Bear, Stearns & Co. Inc. is serving as financial advisor to Symbol and
Prudential Securities is serving as financial advisor to Telxon.
Telxon Corporation is a leading global designer and manufacturer of
wireless networks for mobile computing solutions and information systems.
The company integrates advanced mobile computing and wireless data
communication technology with a wide array of peripherals,
application-specific software and global customer services for its
customers in more than 60 countries around the world. Telxon's global web
site address is: www.telxon.com.
Symbol Technologies, Inc., winner of this year's National Medal of
Technology, is a global leader in mobile data transaction systems,
providing innovative customer solutions based on wireless local area
networking for data and voice, application-specific mobile computing and
bar-code data capture. Symbol's Wireless Information Appliances connect the
physical world of people on the move, packages, paper and shipping pallets,
to information systems and the Internet. Today, some 10 million Symbol
bar-code scanners, mobile computers and wireless LANs are utilized
worldwide in markets ranging from retailing to transportation and
distribution logistics, manufacturing, parcel and postal delivery,
government, healthcare and education. Symbol's systems and products are
used to increase productivity from the factory floor to the retail store,
to the enterprise and out to the home. Information about Symbol is
available at www.symbol.com.
A conference call has been set up for 11:00 am EDT today to discuss the
transaction and Symbol and Telxon's financial results, also released this
morning. The dial in number is 785-832-1077, Pass Code Symbol Technologies
Q2. A replay has been set up and will be available beginning 3:00 pm EDT on
Wednesday, July 26th through Tuesday, August 1st on a 24-hour non-stop
basis. The dial in number to access this replay is: 719-457-0820 Pass Code:
529921.
Except for historical information, all other information in this
presentation consists of forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. These forward-looking
statements are subject to risks and uncertainties which could cause actual
results to differ materially from those projected, anticipated or implied.
The following factors, among others, could cause actual results to differ
materially from those described in the forward-looking statements: the risk
that the business and technology of Telxon will not be integrated
successfully; the failure to realize planned synergies on a timely basis;
costs related to the proposed transaction; failure of Telxon's stockholders
to approve the proposed transaction; and delays in obtaining regulatory
approval of the proposed transaction. Neither Symbol or Telxon undertakes
any obligation to publicly update or revise any forward-looking statements.
The proposed transaction will be submitted to Telxon's stockholders for
their consideration. Such stockholders should read the proxy
statement/prospectus concerning the transaction that will be filed with the
Securities and Exchange Commission and mailed to stockholders. The proxy
statement/prospectus will contain important information that Telxon's
stockholders should consider before making any decision regarding the
proposed transaction. Such stockholders will be able to obtain the proxy
statement/prospectus, as well as other filings containing information about
Symbol and Telxon, without charge, at the SEC's internet site
(http://www.sec.gov). Copies of the proxy statement/prospectus and the SEC
filings that will be incorporated by reference in the proxy
statement/prospectus will be obtainable, without charge, from Symbol and
Telxon.
Symbol and Telxon and certain other persons named below may be deemed to be
participants in the solicitation of proxies of Telxon's stockholders to
approve the transaction. The participants in this solicitation may include
the directors and executive officers of Telxon and executive officers of
Symbol as listed in Symbol's proxy statement for its 2000 annual meeting
which may be obtained without charge, at the SEC's internet site
(http://www.sec.gov).
As of the date of this communication, none of the foregoing participants
individually beneficially owns in excess of 5% of Symbol' common shares or
5% of Telxon's common shares. Except as disclosed above, to the knowledge
of Symbol and Telxon, none of the directors or executive officers of Symbol
or Telxon has any interest, direct or indirect, by security holdings or
otherwise in Symbol or Telxon.
