CNET también está disponible en español.

Ir a español

Don't show this again

ADC buys Saville for $700M

Tech Industry

ADC Telecommunications Inc. (Nasdaq: ADCT), a telecommunications equipment supplier, said Monday that it will buy software developer Saville Systems PLC (Nasdaq: SAVLY) in a stock swap valued at $700 million.

ADC, based in Minnetonka, MN, said the acquisition won't hurt earnings and will boost its bottom line a year after the deal closes. ADC will take a yet-to-determined charge.

Under the terms of the agreement, each share of Saville will be exchanged for 0.358 of an ADC share. At ADC's closing share price of $50.125 on June 18, the transaction is valued at approximately $700 million.

The value of the deal will ultimately depend on the price of ADC shares when the deal closes. ADC estimated the deal will close in the fourth quarter ending Oct. 31.

The acquisition will be accounted for as a pooling of interests and be treated as a tax-free reorganization.

With the acquisition of Saville, based in Dangan, Galway, Ireland, ADC said it can offer software systems that run networks. In a statement, William J. Cadogan, CEO of ADC, said the company's strategy is to grow by offering services.

"The battle among communications service providers is increasingly centered on services rather than technology, and these services can only be managed effectively through software," said Cadogan.

ADC has acquired three software companies in three years and terminated a share buyback plan so it can use its stock to pursue more deals.

With Saville in the fold, ADC said it will create a software unit, which will be run by Lawrence S. Barker, Saville's newly appointed president.

John J. Boyle III, chairman and CEO of Saville, will be an ADC senior vice president and remain chairman of Saville after the deal is completed.

Close
Drag
Autoplay: ON Autoplay: OFF