LARGO, Fla., and ATLANTA --
Paradyne Networks, Inc. (Nasdaq:PDYN) and Elastic Networks Inc.
(Nasdaq:ELAS) today announced they have entered into a definitive agreement for Paradyne to acquire Elastic. Under the terms of the merger agreement, Elastic stockholders will receive .1990 to .2692 shares of Paradyne common stock for each outstanding share of Elastic common stock, based on the 10-day average closing price of Paradyne common stock prior to the consummation of the merger. The exchange ratio range may be subject to an adjustment based on the net working capital of Elastic prior to the merger.
Based on the closing price of Paradyne stock on December 27, 2001 ($3.77), Elastic shareholders would receive equivalent value of $0.86 per share in Paradyne stock. The transaction is valued at approximately $28.8 million. The merger, which was approved by the boards of both companies, is subject to stockholder approval at each company and other customary closing conditions. The transaction is expected to be completed in the first quarter of 2002.
Commenting on the proposed merger, Sean Belanger, Paradyne's president and CEO, stated: "The purchase is a natural extension of our DSL product portfolio. We are excited about four key elements of the transaction. 1) This transaction launches Paradyne into the In-Building DSL market. Combining Elastic's products with our worldwide channel is a great fit for this market. 2) Elastic, like Paradyne, has a strong and complimentary base of Independent Telephone Companies as customers. We expect that the combination will result in over 200 ITCO customers. 3) Elastic brings great technology development in EtherLoop as well as Elastic's 100 Megabit EtherLoop2 to be released in the first half of 2003. 4) We believe the cash and working capital of Elastic provides the combined companies a stronger balance sheet. In addition, Elastic's leadership in IP-based, next generation Ethernet broadband access technologies positions Paradyne as a key player in the emerging Ethernet carrier network architectures."
Paradyne Networks Inc.
Elastic Networks Inc.