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EXHIBIT 99.1
[ADC LOGO] NEWS RELEASE
Centigram and its executive officers and directors may be deemed participants in
the solicitation of proxies with respect to a stockholders meeting to be held in
connection with the proposed merger described below. Information concerning
participants in the solicitation is set forth in Centigram's definitive proxy
statement with respect to its 2000 annual meeting of stockholders, which was
filed with the Securities and Exchange Commission on February 18, 2000. In
connection with the proposed merger, Centigram will file a proxy statement with
the Securities and Exchange Commission. We urge investors and security holders
to read Centigram's Proxy Statement relating to the merger transaction described
below, when it becomes available, because it will contain important information.
When this and other documents relating to the transaction are filed with the
U.S. Securities and Exchange Commission, they may be obtained free at the SEC's
web site at http://www.sec.gov. You may also obtain each of these documents
(when they become available) for free from ADC or from Centigram by directing
your request to the contact persons identified below.
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For Immediate Release
Contacts:
Mark Borman - ADC Investor Relations Marcia Speece - Corporate Communications
952.946.3338 Centigram
mark [email protected] 408.428.3770
------------------- [email protected]
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Rob Clark - ADC Public Relations
952.914.6355
rob [email protected]
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ADC EXPANDS ENHANCED SERVICES SOFTWARE STRATEGY
WITH ACQUISITION OF CENTIGRAM
Goal is to Speed the Delivery of Anytime, Anywhere, Any Device Communications
Proposed Acquisition Gives ADC Added Capability to Offer Broadband Service
Providers Solutions to Generate Additional Revenues and Differentiate Services
MINNEAPOLIS / SAN JOSE, CALIF. - JUNE 9, 2000 - ADC (Nasdaq: ADCT, www.adc.com),
a leading global supplier of network equipment, software and integration
services for broadband, multiservice networks, and Centigram Communications
Corporation (Nasdaq: CGRM, www.centigram.com), a leading global provider of
unified communications, Internet-enabled call management and wireless access
protocol (WAP)-based messaging solutions for communications service providers,
have reached an agreement for the acquisition of Centigram by ADC.
The cash acquisition has a fixed purchase price of approximately $200 million
for all Centigram shares and stock options outstanding as of the closing date,
and will be accounted for using the purchase method. ADC expects to take a
one-time charge for
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ADC ACQUIRES CENTIGRAM - PAGE 2 OF 6
purchased in-process research and development expense, the amount of which has
not been determined. Excluding the one-time charge, goodwill amortization and
amortization of the unvested portion of converted stock options (as required by
FASB Interpretation No. 44), ADC expects the acquisition to be nondilutive to
earnings per share in the first twelve months after closing and accretive
thereafter. ADC expects to close this transaction during the next two to three
months, subject to the approval of Centigram's stockholders, receipt of required
regulatory approvals and other customary conditions.
ADC INCREASES BREADTH AND DEPTH IN HIGH-GROWTH ENHANCED SERVICES
SOFTWARE MARKET
Service providers worldwide incorporate an array of enhanced services such as
unified messaging, paging, fax, and voicemail in order to gain additional
revenues and differentiate service offerings to their customers. In the era of
the Internet and broadband communications, these voice, text and multimedia
services can be delivered over mobile phones, PCs and other devices, creating an
enhanced services market that is expected to grow rapidly. ADC's proposed
acquisition of Centigram will further solidify its position as a leading
provider of enhanced services applications and will strengthen its ability to
offer solutions that allow service providers to offer anytime, anywhere, any
device communications.
ADC's proposed acquisition of Centigram furthers ADC's comprehensive strategy to
be a leading global supplier of communications software for operations support
systems (OSS) and enhanced services applications. With 2,500 systems installed
worldwide at over 250 service providers, Centigram provides a readily available
installed base and established customer relationships for the overlay of ADC's
Singularit.e suite of OSS applications and ADC's NewNet line of enhanced
services solutions, including short messaging and over-the-air provisioning of
wireless applications, signaling (SS7) platforms for call set up and
transactions, and lawful intercept platforms for Internet, wireless and wireline
service providers that complies with the Communications Assistance for Law
Enforcement Act (CALEA). ADC's NewNet business is a leading global supplier of
SS7 and enhanced services applications software. ADC will also benefit from the
addition of Centigram's significant engineering, marketing and sales resources,
as well as development centers in San Jose, CA and Rockville, MD.
"Our acquisition of Centigram represents another significant step forward in
ADC's mission to enable communications service providers to differentiate their
broadband, multiservice
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ADC ACQUIRES CENTIGRAM - PAGE 3 OF 6
offerings and increase their revenues with enhanced services applications.
Convergent applications which facilitate the unification of data and voice
services over Internet, wireless and wireline networks will be strong drivers of
market growth as communications service providers compete to win and retain
customers," said Larry Ford, senior vice president of ADC and president of ADC's
Integrated Solutions Group. "Centigram's broad product line is a great
synergistic fit with ADC's OSS and enhanced services software strategy. In
addition to adding critical mass to ADC's current software offerings, Centigram
brings to ADC a strong worldwide customer base and a highly skilled group of
employees developing next-generation, enhanced services applications for
Internet, wireless and wireline communications."
"We are excited to join ADC in serving the worldwide demand for converging data
and voice services so that users can access and respond to Internet, email,
voicemail and fax messages from telephones, mobile phones, pagers or personal
computers. Our combined goal is to speed the delivery of anytime, anywhere, any
device communications," said Robert L. Pruette, president and CEO of Centigram.
"The ADC/Centigram team is well positioned to lead the way as we enter this new
era of enhanced services communications. Leveraging ADC's expertise in
broadband, multiservice networks with Centigram's expertise in voice messaging,
call processing and Internet-enabled text-based messaging, we have a powerful
combination to create advanced applications that enable providers of Internet,
wireless and wireline communications to open new markets and deliver
cutting-edge services."
HIGH-GROWTH OF ANYTIME, ANYWHERE, ANY DEVICE COMMUNICATIONS
The global proliferation of advanced cell phones and handheld devices is
spurring the demand for anytime, anywhere, any device communications. The
combination of Centigram's and ADC NewNet's resources in enhanced services
applications will enable ADC to offer service providers a more comprehensive set
of software solutions in a rapidly growing market. U.S. Bancorp Piper Jaffray
projects enhanced services to grow at a compound annual growth rate of 70%
through 2003. CIBC World Markets estimates that the nascent wireless data market
should grow more than 100% annually over the next four years. Worldwide
wireless-Internet subscribers are expected to skyrocket to nearly 330 million,
or about 55% of all Internet users, in 2003 from approximately 5 million
subscribers in 1999, according to International Data Corporation.
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ADC ACQUIRES CENTIGRAM - PAGE 4 OF 6
CENTIGRAM'S PRODUCTS
Centigram's products enable service providers to offer applications that
simplify users' lives by integrating Internet, email, voicemail, fax and voice
services for delivery to wireless and wireline communications devices.
These product offerings include:
- Internet and telephony integration through a family of Web-based
Internet call management products;
- Internet and wireless integration through a new generation Short
Message Service to deliver Internet and other real-time content to
wireless handsets;
- PC-based unified messaging that provides users access to voicemail and
faxes from email systems;
- One person/one number services through call forwarding to home, work or
mobile phones; and
- Centigram's Series 6 services platform that supports multiservice
integration for wireless and wireline applications.
Centigram's products are targeted at a wide range of global carriers and service
providers, including long-distance carriers, wireless companies, BOCs, PTTs,
independent telcos in emerging and deregulated markets, cable companies,
next-generation telcos, ISPs, CLECs, Internet Portals and independent
Internet-based service providers.
PER SHARE AMOUNT TO CENTIGRAM STOCKHOLDERS
Due to the fixed purchase price, the per share amount of the acquisition will be
determined as of the closing based on the number of outstanding Centigram shares
and options on such date. As previously announced by Centigram, 900,000 shares
of Centigram treasury stock are currently in the possession of the receiver for
Credit Bancorp, N.V., and Centigram has stated that there is uncertainty
regarding the amount, if any, that Centigram will be required to pay to obtain
the release of these shares. As it announced today, Centigram has entered into
an agreement with the receiver for Credit Bancorp which provides for the return
of the Centigram treasury shares. The court supervising the Credit Bancorp
receivership has preliminarily approved the agreement and has scheduled a
hearing on final approval for next week.
Assuming the court's final approval of the agreement with the receiver, and
based on the number of outstanding shares and stock options as of May 26, 2000,
the purchase will consist of approximately $163 million in cash to Centigram
stockholders or approximately
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ADC ACQUIRES CENTIGRAM - PAGE 5 OF 6
$26.38 per share, and approximately $36 million to be paid in ADC stock through
the conversion of Centigram's employee stock options to ADC stock options. If
Centigram's agreement with the receiver is not finally approved by the court by
the time of closing, or any applicable appeal period has not expired or an
appeal has been taken as of closing, the per share amounts paid to Centigram's
stockholders will be calculated as if the 900,000 shares were outstanding,
resulting in a cash payment of approximately $23.84 per share to Centigram's
stockholders, and $21.5 million ($23.84 per share multiplied by 900,000 shares)
in cash will be placed in escrow until expiration of any applicable appeal
period or resolution of the outstanding issues related to Centigram's treasury
stock. The amount remaining in escrow after recovery of all the treasury shares
and resolution of any outstanding treasury share issues will be paid to the
former Centigram stockholders and stock option holders.
In the last twelve months ended April 29, 2000, Centigram's sales were $82
million as recurring diluted earnings per share of $0.57, before the charge to
operations relating to the settlement with the receiver with respect to the
treasury stock matter, improved significantly from a pro forma loss per share of
$1.87 in the comparable prior-year period.
ADC'S COMMUNICATIONS SOFTWARE ACQUISITIONS
The proposed acquisition of Centigram marks the fourth communications software
acquisition by ADC in the last four years. Other acquisitions include Metrica
Systems (1996), a developer of network performance and service assurance
software; NewNet (1997), a developer of SS7-based enhanced services software;
and Saville Systems (1999), a developer of convergent billing and customer care
software.
ABOUT ADC
ADC is The Broadband Company. ADC's network equipment, software and integration
services make broadband communications a reality worldwide by enabling
communications service providers to deliver high-speed Internet, data, video and
voice services to homes and businesses. ADC (Nasdaq: ADCT) has annual sales of
over $2.3 billion and employs more than 16,900 people worldwide. ADC's stock is
included in the Standard & Poor's 500 Index and the Nasdaq-100 Index. Learn more
about ADC Telecommunications, Inc. at www.adc.com.
ABOUT CENTIGRAM
Centigram Communications Corporation (NASDAQ: CGRM) is a leading global provider
of Internet-enabled call management, WAP-based messaging and unified
communications services to mobile and landline telecom service providers.
Leveraging its expertise in voice messaging, call processing and IP-enabled
multimedia messaging, the company is delivering next-generation communications
services that enable the transmission of voice, text, and
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ADC ACQUIRES CENTIGRAM - PAGE 6 OF 6
multimedia content to wireless and wireline phones, PCs and WAP-enabled devices.
The company delivers these services on the highly integrated Series 6 platform
and the Centigram Short Messaging Service Center. Centigram is headquartered at
91 East Tasman Drive, San Jose, Calif., 95134. Phone 408-944-0250, fax
408-428-3732, or Web www.centigram.com. Centigram has sales and support offices
in North America, Europe, Asia, Latin America, and Australia.
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-a to ADC's Annual Report on Form 10-K for
the fiscal year ended October 31, 1999. Centigram Communications Corporation
cautions readers that future actual results could differ materially from those
projected in any forward-looking statements. The statements could be affected by
Centigram's "Sales and Distribution" and other risks as reflected in its Annual
Report on Form 10-K for fiscal year ended October 30, 1999, or its quarterly
report on Form10-Q for the first quarter ended January 29, 2000, filed with the
Securities and Exchange Commission. In addition, Centigram's future success will
depend in part upon its ability to continue to introduce new features and
products as its markets evolve, new technologies become available, and customers
demand additional functionality.
