ATLANTA -- Verso Technologies, Inc.(Nasdaq:VRSO), a global provider of next generation network solutions,announced today that it has acquired the AccessGate division of NMSCommunications (Nasdaq:NMSS) of Framingham, Massachusetts, pursuant toan asset purchase agreement executed between the parties. In connectionwith the acquisition, Verso paid NMS $850,000 in cash and issued to NMSrestricted shares of Verso common stock having an aggregate value equalto $2.5 million. Verso also assumed certain liabilities associated withthe AccessGate division as part of the acquisition. Verso intends tointegrate the AccessGate division with Verso's NetPerformeroptimization product line to create a robust combined cellular backhauloptimization business focused on the rapidly-growing worldwide cellularbackhaul business.
"This is a strong, growing business with patented technology. Theacquisition of AccessGate roughly doubles the size of Verso's cellularbackhaul optimization business, which has strong positive implicationsfor gross margin and profitability of that business unit and,therefore, the overall financial performance of Verso," said Steven A.Odom, chairman and chief executive officer of Verso. "The transactionis accretive to Verso immediately. It is expected to contribute inexcess of $10 million in revenue over the next year and allows us tofill product gaps in Verso's current NetPerformer product family. Inaddition to the cost savings related to the integration of these twobusinesses, we gain new sales channels through which we can cross-selladditional Verso products and we acquire members of a very capable andknowledgeable management team whom will remain with the company andtake over responsibility for all of Verso's backhaul optimizationbusiness."
The AccessGate technology acquired by Verso directly addresses theexplosive growth in the use of mobile communications around the world.Wireless operators demand affordable backhaul bandwidth to connectgeographically dispersed cell sites to their core networks.AccessGate's patented technology provides operators experiencing rapidsubscriber growth, coupled with the rollout of new bandwidth-intensiveservices, an efficient, state-of-the-art, cost effective bandwidthoptimization solution which fits squarely into an existing Versobusiness unit. According to a recent study performed by ABI Research,global capital expenditures for backhaul are forecast to increase from$14 billion in 2007 to $23 billion in 2012.
"Verso is focused on steady improvement in revenue and gross margin,quarter by quarter," stated Mark Dunaway, president and chief operatingofficer of Verso. "We expect that this acquisition will not onlyincrease the revenue of the business, but will also increase our grossmargin for all of our wireless backhaul products. We also expect thatthis acquisition will allow us to reduce duplicated product roadmapdevelopment efforts which will enable us to bring new products tomarket ahead of schedule and at a much lower cost."
Verso Technologies Inc. (Nasdaq: VRSO)