Lucent Technologies Signs Asset Purchase Agreement to Acquire Riverstone Networks’ Business Operations
Purchase of Carrier Ethernet Router Company’s Net Assets Complements Lucent’s Next-Generation Data and Optical Network Portfolio
FEBRUARY 07, 2006 MURRAY HILL, N.J. — Lucent Technologies (NYSE:LU) today announced that it has signed a definitive purchase agreement to acquire certain net assets related to the business operations of Riverstone Networks (RSTN.PK), a maker of carrier-grade Ethernet routers for the telecommunications industry, for $170 million in cash.
This acquisition will complement Lucent’s broadband, data and optical networking solutions. Lucent currently resells Riverstone’s systems to service providers worldwide to support consumer and business multimedia network services.
“Riverstone is a valued partner in a space that we believe will continue to grow,” said Ken Wirth, president, Multimedia Network Solutions, Lucent Technologies. “This acquisition will enhance our ability to deliver large-scale Ethernet solutions and will allow us to accelerate the development of next-generation, carrier-grade Ethernet solutions that enable our customers to deliver broadband services to businesses and residential subscribers. This is good news for our mutual customers and a symbol of our commitment to provide carrier-grade Ethernet solutions to the market.”
The transaction is subject to completion of a bankruptcy court administered process under Riverstone’s impending reorganization proceeding and other closing conditions.
Riverstone will file a voluntary petition under Chapter 11 of the U.S. Bankruptcy Code (the “Code”), and the acquisition of its assets is expected to occur at the conclusion of an auction process under Section 363 of the Code. If approved by the bankruptcy court, the transaction will be subject to the receipt of regulatory approvals and the satisfaction of other conditions, including the resolution of Riverstone’s matters with the Securities and Exchange Commission. Lucent expects that all required approvals could be obtained and conditions to closing could be satisfied by the middle of the calendar year.
The total consideration for the assets may increase or decrease based on any subsequent change in the value of the net assets as provided in the agreement.
The net assets to be purchased primarily include Riverstone products, intellectual property, certain contracts and receivables, tangible long-lived assets, accounts payable and certain other accrued liabilities. The net assets primarily exclude cash, investments and debt. Substantially all of Riverstone’s 400 employees are expected to join Lucent.
About Lucent Technologies
Lucent Technologies designs and delivers the systems, services and software that drive next-generation communications networks. Backed by Bell Labs research and development, Lucent uses its strengths in mobility, optical, software, data and voice networking technologies, as well as services, to create new revenue-generating opportunities for its customers, while enabling them to quickly deploy and better manage their networks. Lucent’s customer base includes communications service providers, governments and enterprises worldwide. For more information on Lucent Technologies, which has headquarters in Murray Hill, N.J., USA, visit http://www.lucent.com.
This press release contains statements about future performance, events or developments, which are also known as “forward-looking statements.” Forward-looking statements are based on current expectations, estimates, forecasts and projections about us, our future performance and the industries in which we operate as well as on our management’s assumptions and beliefs. Statements that contain words like “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates” or variations of such words and similar expressions are forward-looking statements. Since they relate to future developments, results or events, these statements are highly speculative and involve risks, uncertainties and assumptions that are difficult to assess. You should not construe any of these statements as a definitive or invariable expression of what will actually occur or result. Actual outcomes and results may differ materially from what is expressed or forecasted in such forward- looking statements. Some of the risks and uncertainties include: the successful conclusion of the auction under Riverstone’s bankruptcy court proceeding; our ability to operate effectively in a highly competitive industry with many participants; our ability to keep pace with technological advances and correctly identify and invest in the technologies that become commercially accepted; our reliance on a small number of key customers; fluctuations in the telecommunications market; the pricing, cost and other risks inherent in our long-term sales agreements; exposure to the credit risk of our customers; our reliance on two contract manufacturers to supply most of the products we sell; the social, political and economic risks of our foreign operations; the costs and risks associated with our pension and postretirement benefit obligations; the complexity of our products; changes to existing regulations or technical standards; existing and future litigation; our ability to protect our intellectual property rights and exposure to infringement claims by others; and compliance with environmental, health and safety laws. For a description of these and some other risks and uncertainties, you should read the reports we have filed with the Securities and Exchange Commission, including periodic reports on Forms 10-K, 10-Q and 8-K. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements we make, even if new information, future events, changes in assumptions or any other reason would alter those statements.
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