Tollgrade Acquires Acterna Tester

Tollgrade acquires Cheetah status and performance monitoring product line from Acterna for $14.3 million in cash

February 14, 2003

2 Min Read

PITTSBURGH -- Tollgrade Communications, Inc. (Nasdaq: TLGD) today announced that it has purchased for $14.3 million in cash certain assets and has assumed certain liabilities of the Cheetah(TM) status and performance monitoring product line of Acterna, LLC. As part of the agreement, contingent purchase consideration of up to $2.4 million may be payable in the form of an earn-out based on certain 2003 performance targets for the acquired business. Acterna has retained ownership of the Return Path segment of the product line. Tollgrade will offer jobs to 47 of the former Acterna employees, most of whom are engineers and technicians. Tollgrade plans to consolidate the Cheetah status and performance monitoring product with its LIGHTHOUSE(R) status monitoring system. The product line will be based at Tollgrade's new facility in Sarasota, Florida. "As the cable industry continues to evolve, more service providers recognize the need to proactively monitor power supplies and nodes in the cable broadband access network," said Tollgrade CEO Chris Allison, "For many years, the Cheetah name has been synonymous with cable status monitoring. By combining the Cheetah tradition with the HMS compliance achieved by Tollgrade's LIGHTHOUSE system, we have created a value proposition for large or small system operators, both here and abroad." Allison added, "Because the Cheetah product line is new to us, our management team continues to evaluate its financial impact, as well as its subsequent integration into the company, on our business as a whole. During the first quarter of 2003, we will have owned the product line for roughly six weeks and expect sales of $ 1.7 to $2.0 million for that period. Excluding any one-time integration charges, our earnings goals for the new product line are breakeven at the high end of the sales range. As it progresses, we expect the acquisition to begin to become accretive to earnings during the second half of the year." Acterna Corp. Tollgrade Communications Inc.

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