Verso has closed its previously announced acquisition of sentitO Networks Inc. of Acton, Mass.

April 18, 2007

3 Min Read

ATLANTA -- Verso Technologies, Inc. (Nasdaq: VRSO), a global provider of next generation network solutions, announced today that it has closed its previously announced acquisition of sentitO Networks, Inc. of Acton, Massachusetts. sentitO is an award-winning provider of open and distributed VoIP gateway solutions for telecommunications service providers worldwide.

The acquisition significantly expands Verso's product portfolio and clearly defines Verso's position as a provider of fully integrated next generation communications solutions to the carrier market. Adding the sentitO ONX solution to Verso's proprietary portfolio enables the company to offer a higher scale solution and gain a competitive edge in large scale fully-integrated packet-based deployments. In addition, the transaction will allow Verso to take advantage of an active Russian and Eastern European distribution partnership.

"I am excited to have successfully closed this transaction. Verso gains so much from this transaction, more than just great technology," said Monty Bannerman, chief executive officer, Verso Technologies. "The agreement includes an incentive earn out, which we expect will result in Verso receiving significant additional revenue and enhanced margins in the Softswitch group both short and long term. This will place Verso in a highly competitive position for larger VoIP deals and also places Verso in a region with many exciting new business opportunities with a well established partner," added Bannerman.

"This new purpose-built VoIP switching technology fills the last remaining void in our product strategy. We expect this to drive margins, revenues, and new deployment opportunities," said Steve Odom, executive chairman, Verso Technologies. "It moves us up-market where we can leverage our capabilities to provide a fully integrated solution to large, high-quality carrier customers. This not only takes Verso to the next level, it provides Verso higher density leading edge switching technology, and an edge above those competitors that already have high density switching by providing a fully integrated switching solution at a competitive cost. Furthermore, this transaction should benefit our shareholders, as companies with high density switching solutions tend to be valued at much higher multiples than companies that must partner with equipment manufacturers to provide a high density VoIP integrated solution."

Pursuant to the merger agreement, Verso issued 7.7 million restricted shares of Verso common stock, 2.2 million of which are subject to escrow provisions, and warrants to purchase approximately 841,000 shares of Verso common stock at an exercise price of $1.25 per share. The merger agreement provides that 1.2 million shares of Verso common stock be held in escrow and released based upon the completion of certain in-progress customer activity and approximately 1.0 million shares of Verso common stock be held in escrow to satisfy potential indemnity claims. In addition, $3.0 million of Verso common stock may be issued through an earn-out provision based on Verso achieving a $12.0 million revenue target that is attributable to the sentitO business during the 12 month period following the closing of the acquisition.

The shares of Verso common stock issued or to be issued in the acquisition will not be and have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of such act.

Sentito Networks

Verso Technologies Inc. (Nasdaq: VRSO)

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like