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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): February 7, 1998
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CABLETRON SYSTEMS, INC
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(Exact name of Registrant as Specified in Charter)
DELAWARE 0-10228 04-2797263
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(State or Other Jurisdiction (Commission File (I.R.S. Employer
of Incorporation) Number) Identification No.)
35 Industrial Way, Rochester, NH 03867
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(Address of Principal Executive Offices) (Zip Code)
(603) 332-9400
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(Registrant's telephone number including area code)
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ITEM 2. ACQUISITION OF ASSETS.
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On February 7, 1998, Cabletron Systems, Inc, a Delaware corporation (the
"Registrant") and Ctron Acquisition, Inc., a Delaware corporation and a wholly-
owned subsidiary of the Registrant ("Ctron") purchased substantially all of the
assets (the "Assets") and assumed certain liabilities of the network products
business (the "NPB") of Digital Equipment Corporation, a Massachusetts
corporation ("Digital") pursuant to an Asset Purchase Agreement dated as of
November 24, 1997 (the "Asset Purchase Agreement"), as amended, by and among the
Registrant, Ctron and Digital. The NPB develops and supplies a wide range of
data networking hardware and software. Included among the Assets acquired by the
Registrant is all tangible personal property used primarily in the NPB,
including all machinery and equipment. Also included among the Assets are
parcels of real property designated as 50 and 100 Nagog Park, Acton,
Massachusetts and the furniture and equipment located therein. The closing of
the acquisition extends to the assets and personnel located in the United State
and the inventory worldwide. The remaining international assets and personnel
are expected to be transferred as issues in individual countries are resolved.
The Asset Purchase Agreement is incorporated by reference herein as Exhibit 2.1.
The Registrant and Digital have also entered into a Reseller and Services
Agreement dated as of November 24, 1997 (the "Reseller Agreement"), as amended,
pursuant to which the Registrant has designated Digital as its Strategic Network
Services Partner and has appointed Digital as a reseller of certain products of
the Registrant (including the products previously sold by the NPB), and Digital
has designated the Registrant as its Strategic Network Products Partner and has
agreed to purchase from Registrant, for internal use and resale, certain minimum
volumes of products during the term of the Reseller Agreement, which extends
through June 30, 2001. The minimum volume commitments are subject to downward
or upward adjustment in certain instances. During the term of the Reseller
Agreement, the Registrant will operate the NPB under the name DIGITAL Network
Products Group, a Cabletron Systems, Inc. Company. The Reseller Agreement is
incorporated by reference herein as Exhibit 10.1.
A copy of the Registrant's press release dated February 9, 1998 is attached
hereto as Exhibit 99 and is incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
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(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. It is currently
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impracticable to provide the required financial statements in this Current
Report. All of the required financial statements will be filed by amendment.
(b) PRO FORMA FINANCIAL INFORMATION. It is currently impracticable to
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provide the required financial statements in this Current Report. All of the
required financial statements will be filed by amendment.
(c) EXHIBITS.
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Exhibit No. Title
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2.1 Asset Purchase Agreement dated as of November 24, 1997
(the "Asset Purchase Agreement"), as amended, by and among
the Registrant, Ctron, and Digital, including a list briefly
identifying the contents of the exhibits and disclosure
schedules to the Asset Purchase Agreement. (Incorporated by
reference from Exhibit 2.1 to the Registrant's Form 10-Q, for
the quarterly period ended November 30, 1997, filed on
January 14, 1998.)
10.1 Reseller and Services Agreement dated as of November 24,
1997, as amended, by and between the Registrant and Digital
(the "Reseller Agreement"), including a list briefly
identifying the contents of the exhibits and disclosure
schedules to the Reseller Agreement. (Incorporated by
reference from Exhibit 10.1 to the Registrant's Form 10-Q, for
the quarterly period ended November 30, 1997, filed on January
14, 1998.).
99 Press Release of the Registrant dated February 9, 1998.
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SIGNATURES
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.
CABLETRON SYSTEMS, INC.
Date: February 9, 1998 By /s/ David A. Kirkpatrick
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Chief Financial Officer and
Director of Finance
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EXHIBIT INDEX
Exhibit Number Description Page
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2.1 Asset Purchase Agreement dated as of November 24, 1997
(the "Asset Purchase Agreement"), as amended, by and among
the Registrant, Ctron, and Digital, including a list briefly
identifying the contents of the exhibits and disclosure
schedules to the Asset Purchase Agreement. (Incorporated by
reference from Exhibit 2.1 to the Registrant's Form 10-Q, for
the quarterly period ended November 30, 1997, filed on
January 14, 1998.)
10.1 Reseller and Services Agreement dated as of November 24,
1997, as amended, by and between the Registrant and Digital
(the "Reseller Agreement"), including a list briefly
identifying the contents of the exhibits and disclosure
schedules to the Reseller Agreement. (Incorporated by
reference from Exhibit 10.1 to the Registrant's Form 10-Q,
for the quarterly period ended November 30, 1997, filed on
January 14, 1998.)
99 Press Release of the Registrant dated February 9, 1998.
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Monday February 9, 11:03 am Eastern Time
Company Press Release
Cabletron Systems Finalizes Acquisition of Digital
Network Products Group
Giulio Gianturco Appointed President of Digital Division
ROCHESTER, N.H.-- February 9, 1998 -- As further evidence of its ability to
rapidly meet its aggressive business expansion goals, Cabletron Systems
announced today the completion of its acquisition of the Digital Network
Products Business (Digital NPB) along with the appointment of industry veteran
Giulio Gianturco as business unit president.
Cabletron acquired the assets and technology of Digital's Network Product
Business for approximately $430 million in cash and product credits. Elements of
the deal include the following:
-- Cabletron will provide current and future Digital-branded network
products, which Digital will sell to customers in addition to selected
products from the Cabletron product line
-- Digital has committed to purchase certain minimum volumes of Cabletron
products during the term of the Reseller Agreement
-- Digital Worldwide Services will continue to provide support for all
Digital-branded network products, and will also provide both warranty and
post-warranty service for Cabletron network products in many geographies
worldwide
With the anticipated formation of business units focusing on enterprise and
service provider markets, both Gianturco and Cabletron newcomer John d'Auguste,
a former Gateway 2000 executive (see 12/19/97 announcement), will work together
as company presidents to lead post-merger integration teams, meld Cabletron and
Digital NPB's product, service and support, and codify business operations.
Gianturco and d'Auguste will focus on maintaining both organizations' customer
service and product delivery efforts throughout the transition, and will also be
responsible for defining and building enterprise and service provider business
units over time.
"It is clear that with the completion of the Digital purchase and our intention
to acquire switch router start-up YAGO Systems, Cabletron is serious about its
aggressive acquisition and partnership strategy," said Don Reed, Cabletron's
president and CEO. "We look forward to significantly increasing our presence
within the channel, as well as the international and service provider markets
with these additions to Cabletron."
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"Cabletron's acquisition of Digital's Network Products Business has given both
organizations tremendous advantages," said Fred McClimans, CEO of Current
Analysis. "Cabletron has gained access to an international distribution channel,
worldwide service organization, Digital's customer base, as well as high and
low-end product lines. Digital has been able to divest itself while maintaining
access to networking technologies for its installed based and systems
integration business."
Before joining Cabletron, Giulio Gianturco was Digital's Network Product
Business vice president, sales and marketing, responsible for defining,
developing and implementing marketing, systems engineering, and sales strategies
for the Digital networking division encompassing the US, Canada and Latin
American countries. Gianturco was also responsible for building awareness and
generating product demand across all channels, and developing strategic
partnerships with resellers and distributors.
In addition to his work at Digital, Gianturco held a number of senior sales and
marketing positions at AT&T's Global Business Communications Systems Business
Unit (now known as Lucent Technologies) and played a key role in deploying the
unit's total quality management system and overall channel strategy.
"Giulio shares the same leadership qualities and management values that I hold
in the highest regard," said Cabletron's Don Reed. "His leadership coupled with
years of industry experience will provide an unparalleled resource for
Cabletron."
The closing of the acquisition extends to the assets and personnel located in
the United States and the inventory worldwide. The remaining international
assets and personnel are expected to be transferred as issues in individual
countries are resolved.
Cabletron Systems, a recognized leader in providing high-performance computer
networking products, has provided dependable network access and communications
to millions of people throughout the world. With scaleable products designed for
Fortune 1000 enterprise networks, service providers and small businesses,
Cabletron provides simple, reliable and cost-effective business solutions for
the information age.
With corporate headquarters in Rochester, NH, Cabletron employs more than 6,300
people world-wide. Cabletron's common stock is traded over the New York Stock
Exchange under the symbol CS.
Cabletron's World Wide Web site can be reached on the Internet at
http://www.cabletron.com/
The statements in this press release concerning the anticipated benefits of
Cabletron's relationship with Digital constitute forward looking information,
and actual results could differ materially. The acquisition of the NPB from
Digital involves numerous risks including difficulties in assimilating the
operations, technologies and products of the NPB, the diversion
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of management's attention from other business concerns, risks of entering
markets and distribution channels in which Cabletron has no or limited direct
prior experience and where competitors in such markets have stronger market
positions, and the potential loss of key employees effect on the Company's
business, operating results or financial condition. Pursuant to its agreements
with Cabletron, Digital has agreed to resell certain Cabletron products,
including the NPB products, and has committed to purchase certain minimum
volumes of Cabletron products for resale and internal use. Any failure by
Digital to purchase the committed product volumes would have a material adverse
impact on Cabletron's results of operations. For a detailed discussion of the
risks and uncertainties related to the Company's business, please refer to the
Company's Annual Report on Form 10-K for fiscal 1997.
Contact:
Cabletron Systems
Public Relations
Betsey Winckler
(603) 337-2588
[email protected]
or
Cabletron Systems
Investor Relations
Jim Caldwell
(603) 337-4225
[email protected]
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