Acquisition of Software, Hardware and Professional Services Expands Global
Footprint of Broadband Network Testing
PITTSBURGH, Pa., May 31 /PRNewswire-FirstCall/ -- Tollgrade
Communications, Inc. (Nasdaq: TLGD) today announced that it has reached a
definitive agreement to acquire the assets of the Broadband Test Division
of Teradyne, Inc. (NYSE: TER).
(Logo: http://www.newscom.com/cgi-bin/prnh/20050603/CLF046LOGO )
The Teradyne Broadband Test Division will add a significant European
presence of customers for which Teradyne currently provides traditional
POTS and DSL testing solutions. Tollgrade will acquire substantially all
the assets of this business for $12 million in cash, plus the assumption of
specified liabilities, subject to adjustment for certain items. Completion
of the acquisition is subject to customary closing conditions, and is
expected to occur in the third quarter of 2007. Tollgrade preliminarily
expects that the acquisition will be accretive to GAAP earnings per share
in fiscal year 2007, and could add up to $10 million to 2007 revenues.
"In February 2006, we acquired the test system business unit of Emerson
Network Power, Energy Systems, North America Inc., growing our telephony
embedded base by approximately 25%. This acquisition will further expand
that embedded base bringing our total worldwide metallic access lines under
test to 350 million, which significantly expands our global market share of
total metallic access lines under test," said Mark B. Peterson, Tollgrade's
President and Chief Executive Officer. "Consistent with the strategy to
protect our network assurance leadership while leveraging our expanded
global market share, this acquisition adds volume and capability to our
already strong broadband service assurance business. We look forward to
serving some of the largest and most advanced service providers in Europe
and discussing with them how Tollgrade's newest technologies, when
integrated into their existing test infrastructures, can help them roll-out
triple-play networks and services more quickly and efficiently," added
Peterson.
Tollgrade expects to integrate these product lines and the key people
who support them into its operations at its home base near Pittsburgh, in
addition to maintaining international field offices required to service
customers.
About Teradyne's Broadband Test Products
The Broadband Test solutions support 160 million voice lines and 60
million DSL lines worldwide. The primary products of this business include:
-- Celerity(R) is a Central Office-based automated loop qualification test
system that carries out narrowband measurements including insertion
loss, through the existing voice switch test access to accurately pre-
qualify lines in mass-volume for broadband DSL service. The Celerity
system performs scheduled and real-time qualification tests to identify
faults, load coils, loop length and loss, plus minimum guaranteed speed
of each line. Celerity testing detects the presence of line treatment
or termination equipment, i.e. DLC, DAML and PBX, enabling it to
distinguish DSL-ready POTS lines from loops with equipment and services
that prohibit DSL.
-- The 4TEL(R) product line builds on the established copper loop testing
and analysis platform called 4TEL Demand Test (DT). 4TEL DT is a
comprehensive suite of tests that characterize the line from the
exchange to the premises terminations. Measurements are made between
each leg of the pair, from each leg to ground and from each leg to
office battery. Its 4TEL Routine Test product provides the means to
pro-actively test each line in the network on a regular basis. This
functionality, known as routining, allows the service provider to
schedule automated testing for the lines in any or all exchanges. The
4TEL XT Test product extends the capabilities of the basic demand test
by giving the user an additional level of troubleshooting tools. The
Tier 2 (back office) or field technician can now perform diagnostic
testing that identifies service impairments that normally can't be
addressed by a single demand test.
-- The LDU 50 test unit provides qualification, provisioning and service
assurance testing of next generation access networks. The LDU 50
supports local loop testing in exchange-based applications as well as
in the extended temperature environment of remote cabinet applications
(DLC, BBDLC, MSAN and FTTC), including those deployed in support of
new IP networks. Its predecessor, the LDU 100, helps network operators
to reduce costs of maintaining and provisioning voice and broadband
data services over a complex copper plant. The LDU is Teradyne's
latest generation test head providing best-in-class physical and
logical testing of triple-play services served from traditional
switched networks, broadband DSLAMs, or new IP-based Fiber-To-The-Node
(FTTN) networks. The LDU supports full 4TEL and Celerity physical loop
test functions, enabling network operators to reduce the cost of
provisioning and maintaining voice and broadband Internet and video
services.
-- Support for 4TEL products include software that is backed by a world-
wide professional services organization offering pre-sales support,
installation, project management, helpdesk support, customization, and
on-going system management and improvement through software
maintenance.
About Tollgrade
Tollgrade Communications, Inc. is a leading provider of network service
assurance products and services for centralized test systems around the
world. Tollgrade designs, engineers, markets and supports centralized test
systems, test access and status monitoring products, and next generation
network assurance technologies for the broadband marketplace. Tollgrade's
customers range from the top RBOCs and Cable providers, to numerous
independent telecom, cable and broadband providers around the world.
Tollgrade's network testing, measurement and monitoring solutions support
the infrastructure of cable and telecom companies offering current and
emerging triple play services. Tollgrade, headquartered near Pittsburgh in
Cheswick, Pa., and its products and customer reach span over 300 million
embedded access lines, more than any other test and measurement supplier.
For more information, visit Tollgrade's web site at
http://www.tollgrade.com .
Forward-Looking Statements
The foregoing release contains "forward-looking statements" regarding
future events or results within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended, including statements concerning the
Company's current expectations regarding the completion of the acquisition
described herein, the anticipated effect of the acquisition on the
Company's 2007 revenue and earnings results, and the Company's ability to
introduce next generation network technologies into existing customer
infrastructures and to execute its strategies. The Company cautions readers
that such "forward-looking statements" are, in fact, predictions that are
subject to risks and uncertainties and that actual events or results may
differ materially from those anticipated events or results expressed or
implied by such forward- looking statements. The Company disclaims any
current intention to update its "forward-looking statements," and the
estimates and assumptions within them, at any time or for any reason. In
particular, the following factors, among others could cause actual results
to differ materially from those described in the "forward-looking
statements:" (a) inability to complete and satisfy all pre-closing
conditions and consummate the transactions described above; (b) inability
to secure key relationships with key suppliers, customers and employees of
the acquired business; (c) the ability to successfully integrate the
acquired business and to effectuate the synergies and achieving revenues
and targets necessary to make the acquisition accretive during 2007; (d)
inability to gain market acceptance of our products in the new
international customer base; (e) possible delays in, or the inability to
complete, the renewal of a significant maintenance contract with one of the
customers of the acquired business, or to complete negotiation and
execution of agreements with new customers; (f) our ability to close
certain international opportunities, due to numerous risks and
uncertainties inherent in international markets; (g) our dependence upon a
limited number of third party subcontractors to manufacture certain aspects
of the products we sell; (h) the ability to manage the risks associated
with and to grow our business; and (i) the uncertain economic and political
climate in the United States and throughout the rest of the world and the
potential that such climate may deteriorate.
Other factors that could cause actual events or results to differ
materially from those contained in the "forward-looking statements" are
included in the Company's filings with the U.S. Securities and Exchange
Commission (the "SEC") including, but not limited to, the Company's Form
10-K for the year ended December 31, 2006 and any subsequently filed
reports. All documents are also available through the SEC's Electronic Data
Gathering Analysis and Retrieval system at http://www.sec.gov or from the
Company's website at http://www.tollgrade.com .
SOURCE Tollgrade Communications, Inc.
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Related links:
http://www.tollgrade.com
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NewsCom: http://www.newscom.com/cgi-bin/prnh/20050603/CLF046LOGO
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CONTACT:
Bob Butter of Tollgrade Communications, Inc.,
Office, +1-412-820-1347, Cell, +1-412-736-6186,
bbutter@tollgrade.com
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