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Nortel hooks Periphonics
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August 24, 1999: 11:03 a.m. ET
Networking giant to buy voice applications firm for $436M in stock
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NEW YORK (CNNfn) - Canadian communications and networking firm Nortel Networks will acquire Periphonics Corp. in a stock deal worth approximately $436 million, the companies announced Tuesday.
Periphonics (PERI), based in Bohemia, N.Y., makes voice recognition and online systems for company call centers and other network applications.
Nortel (NT) is hoping to use these applications, along with its own technology, to create unified voice, data and Internet networks for companies, according to Wayne Fothergill, president of Nortel Enterprise Applications Solutions.
"Together, our solutions will be even more attractive to businesses that want to use the Internet and voice activation to deliver more powerful, versatile and responsive customer care than ever before," said Fothergill.
Under terms of the agreement, Periphonics shareholders will swap their shares for Nortel's at an exchange ratio equal to $29.32 per share. The ratio will fluctuate, depending on Nortel's price, but the eventual share price will remain $29.32.
Nortel's stock was down 1 to 42-5/8 in mid-morning trading Tuesday.
Nortel looks for the transaction to be completed during the fourth quarter, and should be tax-free and add slightly to Nortel's earnings per share.
Nortel will add Periphonics 900 employees, and Periphonics will remain in its New York state headquarters with its current leadership intact.
Periphonics had revenues for the fiscal year ended May 1999 of $142 million.
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