Tech Industry

Nortel to buy Periphonics for $436 million

Nortel Networks (NYSE: NT) said Tuesday it will buy Periphonics Corp. (Nasdaq: PERI), a provider of interactive voice software for about $436 million as it expands with the convergence of voice, video and data on the same lines for Internet usage.

Periphonics shares closed Monday at 25 1/4. Shares in Nortel, one of the world's biggest makers of telecommunications equipment, closed at 43 5/8. Nortel skipped past earnings in its second quarter.

The acquisition will mark another milestone in Nortel Networks' strategy to deliver a new generation of networks that unify voice and data. Periphonics' software for call centers and other voice and data networks will further Nortel's moves to unify call centers with the Internet.

Periphonics will become a wholly owned subsidiary of Nortel Networks, and will continue to be headquartered in Bohemia, N.Y. Chairman, CEO and president Peter Cohen will also continue to lead the business following the merger.

Under the terms of the deal, each share of Periphonics will be converted into a fraction of a Nortel Networks share at an exchange ratio equal to $29.23 divided by the average price of a Nortel Networks share during a specified period prior to closing. The $436 million price tag is based on Nortel's closing price of $43.625 per share.

The transaction, expected to close in the fourth quarter of 1999, should be slightly accretive to Nortel Networks' earnings per share in calendar year 2000, excluding acquisition-related charges.