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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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): September 16, 1998
ADC TELECOMMUNICATIONS, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-1424 41-0743912
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
12501 Whitewater Drive, Minnetonka, Minnesota 55343
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 938-8080
Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. OTHER EVENTS.
ADC Telecommunications, Inc. ("ADC") announced today that it has
executed a definitive agreement with Teledata Communications Ltd. ("Teledata")
pursuant to which ADC will pay $15.75 per share or approximately $200 million in
cash for all of Teledata's outstanding shares of stock and to convert
outstanding Teledata stock options into ADC common stock options. The
transaction is expected to close by the end of 1998. See Exhibit 99.1 attached
hereto.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
99.1 Press release, dated September 16, 1998
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: September 16, 1998
ADC TELECOMMUNICATIONS, INC.
By /s/Robert E. Switz
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Robert E. Switz
Senior Vice President and
Chief Financial Officer
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EXHIBITS INDEX
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Exhibit No. Page
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99.1 Press Release, dated September 16, 1998................... 4
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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
CONTACTS: ADC TELECOMMUNICATIONS
Mark Borman, Investor Relations
(612) 946-3338
Lynne High, Marketing Communications
(612) 946-3160
TELEDATA COMMUNICATIONS
Shmuel Arvatz, CFO
972-9-9591-410
Marilena Michaelidou
(212) 983-1702
ADC TELECOMMUNICATIONS TO ENTER BROADBAND DLC MARKET
WITH ACQUISITION OF TELEDATA COMMUNICATIONS
ACQUISITION MEETS THREE STRATEGIC OBJECTIVES FOR ADC
MINNEAPOLIS, MINN. AND HERZLIA, ISRAEL -- SEPTEMBER 16, 1998 --
ADC Telecommunications, Inc. (Nasdaq: ADCT; www.adc.com) and Teledata
Communications Ltd. (Nasdaq: TLDCF; www.teledata.co.il) today announced that ADC
has agreed to pay $15.75 per share or approximately $200 million in cash for all
of Teledata's outstanding shares of stock and to convert outstanding Teledata
stock options into ADC common stock options. A definitive agreement has been
executed and the transaction is expected to close by the end of 1998, subject to
certain conditions including, among others, Teledata shareholder approval,
judicial approval and receipt of necessary governmental consents. At the closing
of the transaction, ADC expects to take a one-time charge for purchased research
and development expense of which the amount has not yet been determined.
Teledata, based in Herzlia, Israel, is a leading global supplier of mid-sized
digital loop carrier (DLC) systems (from 60 to 960 access lines), which is an
area defined by some analysts as the fastest growing segment of the DLC market.
Teledata has a broad range of customers in the international market, with
particular strength in Europe, the Middle East, South Africa, Australia
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and Latin America. The acquisition of Teledata provides ADC with immediate
leverage in those markets and speeds progress toward ADC's goal to grow
international sales to 30% of total sales from 21% today. Teledata had revenues
of US $69 million in the twelve months ended June 30, 1998 and has approximately
325 employees.
"Our acquisition of Teledata meets three important strategic objectives for
ADC," said William J. Cadogan, chairman and chief executive officer of ADC
Telecommunications. "First, it provides ADC with a springboard from which to
further strengthen our broad offering of local loop technologies for a
strategically important segment of the last-mile telecommunications network -
the digital loop carrier market. Second, we obtain new distribution channels as
well as fiber, copper and wireless telecommunications products to increase our
international sales. And third, we now have a platform from which we can develop
a broadband digital loop carrier system for both the U.S. and international
markets using the voice, video and Internet/data technologies we have in our
current portfolio and under development."
"We are pleased to join forces with ADC Telecommunications in bringing worldwide
solutions that enable service providers to offer high-speed, integrated voice,
video and Internet/data services in the last mile of the telecommunications
network," said Joseph Atsmon, Teledata's chief executive officer. "ADC's strong
technology portfolio and global sales network will help leverage the growth
potential of Teledata's digital loop carrier platform to expand further
internationally and accelerate its entrance into the U.S. market."
Mr. Cadogan added, "We are especially impressed with the technology and
knowledge base that Teledata's research and development teams possess. Israel
has emerged as a center of technological innovation. We look forward to working
together in developing broadband digital loop carriers that will bring faster,
cost-effective solutions to both the U.S. and international markets."
By 2001, the number of subscribers connecting to telecommunications services
over DLC systems is expected to double from 1997 levels. Traditional DLCs are
narrowband transmission
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systems in the local loop that transport voice signals. Broadband DLC systems
will soon be delivering not only voice, but high-speed Internet/data and video
services over fiber lines from a provider's central office to a remote
neighborhood site where the service is transitioned to copper wires, coaxial
cables or wireless systems for delivery to the end user. Service providers are
expected to deploy new broadband DLCs to offer more high-speed, digital services
than currently available using traditional DLCs and copper wire networks.
Internationally, the market potential for DLCs is greater than in the U.S. as
low tele-density countries are adding infrastructure.
ADC TELECOMMUNICATIONS, INC. is a leading global supplier of voice, video and
data systems for telephone, cable television, Internet, broadcast, wireless and
private communications networks. ADC's systems enable local access and
high-speed transmission of communications services from providers to consumers
and businesses over fiber optic, copper, coaxial and wireless media.
Headquartered in Minneapolis, Minnesota, ADC has approximately 7,800 employees
around the world and annual sales of $1.3 billion.
TELEDATA COMMUNICATIONS LTD. designs, develops, manufactures, markets and
supports advanced wireline and wireless customer access network equipment for
telephone operating companies worldwide. Teledata's products enable telephone
companies to enhance the capacity, reach and functionality of the network
transmission links that connect subscribers to the local exchange, generally
known as the "local loop" network. Using Teledata products, telephone operating
companies can quickly and cost-effectively deploy new networks using fiber,
copper and radio links and upgrade the existing infrastructure in order to
substantially increase the number of subscribers that can be served and expand
and improve the scope and quality of services offered.
For more information on ADC, click on Investor at our new Investor Relations web
site at http://www.adc.com or call (888) 329-9823 to receive ADC
Telecommunications' press releases by fax on demand.
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CAUTIONARY STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Any forward-looking statements contained herein reflect management's current
expectations or beliefs. ADC Telecommunications cautions readers that future
actual results could differ materially from those in forward-looking statements
depending on the outcome of certain factors, including the risks and
uncertainties identified in Exhibit 99 to ADC's Report on Form 10-K for the
fiscal year ended October 31, 1997. Teledata Communications cautions readers
that future actual results could differ materially from those in forward-looking
statements depending on the outcome of certain factors, including the risks and
uncertainties identified in Teledata's various filings with the Securities and
Exchange Commission.
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