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DECEMBER 17, 2007 -- Turin Networks Inc. (search for Turin Networks) today announced a definitive agreement to acquire Carrier Access Corp. for approximately $92.7 million in cash subject to certain adjustments. Turin says the addition of Carrier Access' portfolio of wireless backhaul and converged access products extends its suite of iConnect-based products to the service provider edge.
Per the agreement, stockholders will receive $2.60 for each outstanding share of Carrier Access' common stock, subject to adjustment. This represents a premium of 14.7% over Carrier Access' 20-day average stock price of $2.27 through December 14th, 2007. The purchase price is subject to adjustment in the event that Carrier Access has less than $63 million in "closing cash," as defined in the definitive agreement.
"The driver for Turin's significant growth over the past year has been carriers' increasing infrastructure investments to accommodate wireless data traffic and expanded Ethernet service offerings," explains Henry Wasik, chief executive officer of Turin Networks. "This led us to pursue strategic expansion opportunities that complement our growth drivers and provide our customers with enhanced value. The Carrier Access acquisition leverages our strengths in wireless, as well as converged IP networks, and enables Turin to offer comprehensive solutions that extend to the edge of the service provider network," he says.
The companies say the acquisition will benefit both of their customers. The combined company will offer a unified portfolio for mobile backhaul, fixed mobile convergence, and converged business service delivery, and add strategic technologies such as pseudowires, VoIP, and access routing. The companies say the benefits of increased scale will also elevate the resultant company's ability to innovate, providing the capacity to develop new products that expand upon the existing portfolio.
Carrier Access, with facilities in Boulder, CO, and Shanghai, China, has a base of over 100 customers, including major Tier 1 wireless and wireline carriers, cable operators, enterprises, and government agencies. The Carrier Access product portfolio includes products that span the wireless backhaul network from the cell-site to the network edge, as well as converged access technologies that enable service providers and enterprise customers to deliver carrier-quality IP voice and data services, say Carrier Access representatives.
"We believe that this transaction is beneficial to Carrier Access stockholders, employees, and to the respective customers of both companies," notes Allen Snyder, president and CEO of Carrier Access. "Turin is a good cultural fit for Carrier Access employees. The combined company will have the scale to accelerate Turin's position as a leader in the telecommunications industry. Turin's and Carrier Access' combined product portfolio, broad customer base, and expertise are ingredients for success in the marketplace," he adds.
The definitive agreement has been unanimously approved by the boards of directors of both Turin Networks and Carrier Access. The transaction is subject to the approval of Carrier Access stockholders and certain other customary closing conditions. The directors and executive officers of Carrier Access have agreed to vote their shares, which constitute 38.3% of the outstanding common stock of Carrier Access, in favor of the transaction. The transaction is expected to close in the first calendar quarter of 2008 and is intended to be treated as a taxable purchase of the securities of Carrier Access.
The Turin Networks board was advised by Deutsche Bank, and the Carrier Access board was advised by Jefferies Broadview.
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