NETGEAR to Purchase Customer Networking Solutions Business of Westell Technologies, Inc.
Acquisition Will Make NETGEAR a Leader in the U.S. Telecom Customer Broadband Networking Equipment Market
SAN JOSE, Calif., March 18, 2011 - NETGEAR®, Inc. (Nasdaq: NTGR), a global networking company that delivers innovative products to consumers, businesses and service providers, today announced the execution of a definitive agreement to acquire substantially all of the assets of the Customer Networking Solutions ("CNS") division of Westell Technologies, Inc.
The CNS division of Westell is a leading provider of carrier class broadband networking products to U.S. telecommunications service providers. Its CNS family of products enables high-speed transport and networking of voice, data, video and other advanced services over existing copper and fiber infrastructures.
Under the terms of the agreement, NETGEAR will pay approximately $33.5 million in cash out of existing reserves for substantially all the assets of Westell's CNS division, with the exception of certain customer relationships which Westell will retain. Westell will also retain its HomeCloud product line. The business relating to the assets that NETGEAR is acquiring generated approximately $39.5 million in net revenue for Westell during the twelve month period ended December 31, 2010. The acquisition is subject to various customary closing conditions, including the execution of certain third party consents, and is currently expected to close in NETGEAR's second fiscal quarter. NETGEAR anticipates integration of the business to take approximately 3 months following the closing. More detailed information will be provided when NETGEAR presents its fiscal first quarter results at the end of April.
"This transaction will position NETGEAR as a leader in the U.S. telecommunications service provider home network equipment market. The addition of the CNS customer base that we are acquiring will allow us to accelerate our service provider revenue growth and strengthen our market position among North America Telecommunications operators. We believe that following completion of integration of the CNS business into NETGEAR that the transaction will not have an adverse impact on our overall company operating margins," said Patrick Lo, Chairman and CEO of NETGEAR.
Michael Clegg, Senior Vice President and General Manager of NETGEAR's service provider business unit, said "Our combination with Westell's CNS division will create significant benefits for our customers, including access to a broader selection of products and enhanced customer services and support. We're also excited about the opportunity to open up our entire portfolio of products to the customers we are gaining from the CNS customer base and our ability to leverage CNS' proprietary technology to the rest of our service provider customers worldwide. We are delighted to welcome their talented people onto our team and look forward to a brighter future together."
Rick Gilbert, Chairman and CEO of Westell, said "NETGEAR will give our CNS division a solid platform for growth, as well as the additional opportunities and resources that come from being part of a large global organization focused solely on customer broadband networking products. Together, the combined entity will be able to build on our proven track record of success and market leadership to bring new benefits to CNS customers and employees alike. We look forward to working with NETGEAR's management team to achieve a smooth and rapid integration of the two businesses."
Under the terms of the transaction, NETGEAR is acquiring a select team of Westell employees, including the CNS sales and marketing team, most of its customer base, its core CNS product and test engineering teams, nineteen patents and pending patent applications, proprietary technologies, current products, and products in development. The addition of CNS' seasoned engineering teams forms a dedicated, world-class group focused on hardware, software, and technology for customer broadband networking products.
About Westell Technologies, Inc.
Westell Technologies, Inc., headquartered in Aurora, Illinois, is a holding company for Westell, Inc. and Conference Plus, Inc. Westell, Inc. designs, distributes, markets and services a broad range of broadband customer-premises equipment, digital transmission, remote monitoring, power distribution and demarcation products used by telephone companies and other telecommunications service providers. Conference Plus, Inc. is a leading global provider of audio, web, video and IP conferencing services. Additional information can be obtained by visiting www.westell.com and www.conferenceplus.com.
About NETGEAR, Inc.
NETGEAR (Nasdaq: NTGR) is a global networking company that delivers innovative products to consumers, businesses and service providers. For consumers, the company makes high performance, dependable and easy to use home networking, storage and digital media products to connect people with the Internet and their content and devices. For businesses, NETGEAR provides networking, storage and security solutions without the cost and complexity of Big IT. The company also supplies top service providers with retail proven, whole home solutions for their customers. NETGEAR products are built on a variety of proven technologies such as wireless, Ethernet and powerline, with a focus on reliability and ease-of-use. NETGEAR products are sold in over 28,000 retail locations around the globe, and through more than 37,000 value-added resellers. The company's headquarters are in San Jose, Calif., with additional offices in 25 countries. NETGEAR is an ENERGY STAR partner. More information is available at netgear.com/ or by calling (408) 907-8000. Connect with NETGEAR at twitter.com/NETGEAR and http://www.facebook.com/NETGEAR.
SOURCE NETGEAR, Inc.
CONTACT: Joseph Villalta, The Ruth Group, +1-646-536-7003, jvillalta@theruthgroup.com
Web Site: www.netgear.com
