Acquisition as simple as ADC

ADC, suppliers of fibre optics, network equipment, software and integration services for broadband, multiservice networks, has announced an agreement for the acquisition of Broadband Access Systems in a stock-for-stock transaction worth an estimated $2.25 billion.

Under the terms of the transaction, ADC will issue shares of its common stock having a value of $2.25 billion for all outstanding equity interests in Broadband Access Systems.

The number of shares of ADC’s common stock to be issued will be based on an average of the closing price of ADC’s common stock for the five trading days prior to closing, subject to a collar on the value of ADC’s common stock of $34.127 to $41.711.

The proposed transaction is likely to be concluded prior to the end of the calendar year.

Closing of the proposed transaction is subject to the approval of Broadband Access Systems’ stockholders, receipt of required regulatory approvals and other customary conditions.

After closing the transaction, ADC expects to take a one-time charge for various acquisition-related expenses, although the final amount has not yet been determined.

If the deal closes during ADC’s fourth fiscal quarter, ADC expects the acquisition to be $0.02 dilutive to its earnings per share in the fourth quarter of fiscal year 2000. Similarly, $0.07 to $0.08 dilutive in fiscal year 2000; $0.05 to $0.06 dilutive in fiscal year 2001 and accretive thereafter, depending on the value of ADC’s stock over the measurement period.

The number of shares issued will range from approximately 66 million at the low end of the collar range to approximately 54 million at the high end of the collar range.

‘Broadband Access Systems’ products will form the cornerstone of ADC’s strategy to offer next-generation, Internet Protocol systems for the delivery of Internet and voice services over broadband networks,’ said Arun Sobti, senior vice president of ADC and president of ADC’s Broadband Access and Transport Group.