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October 15, 1997updated 03 Sep 2016 11:28am

LUCENT BUYS REMOTE ACCESS COMPANY LIVINGSTON FOR $650M

By CBR Staff Writer

Lucent Technologies Inc is stepping up its efforts to get into the data networking market, acquiring with modem and remote access manufacturer Livingston Technologies Inc for around $650m worth of Lucent stock. Privately-held Livingston was one of the few remaining independent modem/remote access developers as many of its rivals have already been snapped up by larger concerns in the past year. The largest being 3Com Corp’s acquisition of US Robotics Inc for $8.5bn which closed in June. Despite USR’s dominant modem market share, 3Com says it bought the company primarily for its presence in the remote access market. The transaction is expected to be completed by the end of December. Bill O’Shea, president of Lucent’s Business Communications group, who has overall responsibility for the corporations data networking strategy. Livingston will become a division of Lucent and remain headquartered in Pleasanton, California. Steven Willens, Livingston’s current president and CEO will head the division. Willens will report to Bill O’Shea, president of Lucent’s Business Communications group Livingston says its supplies its remote access products to around 2,200 ISPs. Lucent says the purchase is expected to result in a one-time, non-cash charge against earnings. The charge involves an accounting write-off assigned to in-process research and development and will be taken in the first fiscal quarter of 1998 assuming the transaction is closed by December 31, 1997. Excluding this one time charge, the purchase is expected to be slightly dilutive to earnings in the first year of operation and neutral by year two. Livingston, founded in 1986 had filed a registration statement with the Securities and Exchange Commission for an initial public offering, but the clearly felt that a position inside Lucent would be a better option. The Lucent deal is one in a number of remote access company takeovers in the last year. As well as the 3Com/USR deal – the largest merger in the networking industry – in March, Hayes Microcomputer Products Inc bought modem rival Cardinal Technologies Inc to boost its consumer modem line and in April, Compaq Computer Corp stepped up its networking ambitions with the acquisition of modem manufacturer Microcom Inc. Most recently Hayes said it would merge with Access Beyond Inc which specializes in advanced modem, ISDN, remote access internetworking product lines.

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