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AudioCodes to Buy CTI2

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2/1/2007
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LOD, Israel -- AudioCodes (Nasdaq: AUDC - News), a leading provider of Voice over Packet (VoP) technologies and Voice network products, today announced its intent to exercise its option to purchase the remaining outstanding shares of CTI Squared Ltd. ("CTI2"), a leading provider of enhanced messaging and communications platforms deployed globally by service providers and enterprises. CTI2's platforms integrate data and voice messaging services over internet, intranet, PSTN, cellular, cable and enterprise networks. It employs approximately 30 people and they are based in Israel. The impact of the acquisition on AudioCodes' financial results in 2007 is not expected to be material.

In February of 2006, AudioCodes acquired 10% of the outstanding shares of CTI2 for a purchase price of $1 million, which was paid in cash. AudioCodes intends to exercise the option it also obtained to acquire the remaining shares of CTI2 for a total purchase price of $10 million, $5 million in cash payable by February 28, 2007 and $5 million in cash payable by February 28, 2008. The second installment payment may be reduced by certain claims against CTI2 arising prior to the second payment.

In November of 2006, AudioCodes and CTI2 announced that FASTWEB, Italy's second largest fixed telephony operator and the first player worldwide to develop an all IP network for Triple Play service delivery (voice, data, and video), is expanding its use of CTI2's InTouch(TM) platform, integrated with AudioCodes IPmedia(TM) Media Server, for advanced voicemail and unified messaging services.

"We are very pleased to announce the acquisition of CTI Squared," said Shabtai Adlersberg, Chairman, President and CEO of AudioCodes. "This acquisition further strengthens our strategic initiative to become a key supplier of Converged IP Communication products and solutions to Service Providers worldwide. The CTI2 advanced messaging and communication platforms, together with our IPmedia(TM) IMS-compliant MRFP's (Media Resource Function Processor, also known as Media Servers), enhances our ability to offer revenue generating bundled applications for Wireline, Wireless, Cable, IMS and Fixed- Mobile-Convergence markets."

"We believe that CTI2 has built a strong team that has delivered field- proven enhanced messaging and communications platforms that fit well with AudioCodes' vision of enabling IMS networks," said Erez Marom, CEO of CTI2. "This acquisition offers an even better future for our employees, customers and partners as we combine CTI2's products with AudioCodes financial strength, product portfolio and proven capability to deliver to NEPs and service providers."

AudioCodes Ltd. (Nasdaq: AUDC)

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