HAYES TO PURCHASE MODEM MAKER
CARDINAL TECHNOLOGIES, INC.
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Paul Allen's Vulcan Ventures To Make Strategic Investment In Hayes
Atlanta, GA, 13 March, 1997 -- Hayes Microcomputer Products, Inc. and
Paul Allen's Vulcan Ventures Inc. announced today they have jointly
signed a Letter of Intent under which Hayes would acquire 100 percent of
the outstanding shares of Cardinal Technologies, Inc. for an undisclosed
amount. A privately-held corporation currently headquartered in
Lancaster, Pennsylvania, Cardinal manufactures modems and ISDN adapters.
Vulcan Ventures owns 75 percent of Cardinal shares. The companies plan
to complete this transaction by the end of March 1997, pending necessary
government approvals.
In a separate transaction, the Seattle-based Vulcan Ventures
will become an investor in Hayes. The amount of this investment has not
been disclosed. Hayes plans to explore other business opportunities
with companies within the Paul Allen Group of companies.
For Hayes, the transaction and resulting synergies add
significant new unit volume, expand the company's retail and channel
penetration and will allow the Cardinal brand to thrive as Hayes
continues to sharpen its competitive position under the company's new
management team.
"This acquisition produces a combination of strength, breadth
and economies of scale, such as manufacturing consolidation, improved
capacity utilization, expanded distribution and incremental retail
volume," said Dennis C. Hayes, Chairman. "In addition, we welcome Vulcan
Venture's investment in our company."
"We continue to offer our own popular, branded products with
additional penetration in the U.S. retail channel," Hayes said, noting
Hayes plans to fully support and market the Cardinal brand through
Hayes' Practical Peripherals business unit, focused on consumer and SOHO
(small office/home office) markets.
As a company, Hayes is firmly committed to the K56Flex technology
supported by Lucent and Rockwell, and is a founding member of the
Open56K Forum. All Hayes- branded 56K products -- or an estimated 93
percent of unit volumes shipped in 1997 -- will incorporate the
interoperable K56Flex technology, which Hayes believes will be adopted
by the widest array of industry players and become the de facto
standard.
However, with the acquisition of Cardinal, Hayes will maintain
Cardinal's customer commitment to deliver modems based on x2 technology.
Hayes is confident the recently-announced Cardinal ConnectaT family of
56K modems with x2 technology will be well received by customers and
resellers. Together with some modems shipped under the Practical
Peripherals brand, also owned by Hayes, the company expects to ship less
than seven percent of total unit volume with x2 in 1997.
Hayes plans to close Cardinal's Lancaster, Pennsylvania factory
and consolidate operations at its Norcross, Georgia campus.
Hayes achieved US $260M in FY96 revenues. Cardinal achieved US $57M in
FY96 revenues. This acquisition allows Hayes to consolidate its already
strong #2 market position in the computer communications market.
Dataquest and International Data Corporation rank Hayes as the
#2 modem company in the world.* VisionQuest estimates Hayes' presence
in the retail desktop market to be 11% in the United States.
VisionQuest estimates Cardinal's presence in the retail desktop market
to be 10%.** The acquisition will enable Hayes to establish a stronger
position in the retail marketplace.
Based in Norcross, Georgia, Hayes markets its ULTRA, ACCURA,
OPTIMA, Practical Peripherals and CENTURY brands of modems, remote
access servers and terminal adapters along with Smartcom? communications
software worldwide. Hayes introduced the PC modem in 1981. Today, with
distributors in more than 45 countries, it is one of the largest
manufacturers of modems in the world. For more information about Hayes
and the company's award-winning product lines, visit Hayes' Web site at
http://www.hayes.com.
Cardinal Technologies, Inc. manufactures modems and ISDN
adapters for computers which allow people to communicate and access
information. Cardinal's world class products continue to receive the
highest industry awards for superior performance and value. The
privately-held company was founded in 1987 in Lancaster, Pennsylvania,
and is a member of the Paul Allen Group of technology companies. For
further information, visit the Cardinal Web site at
http://www.cardtech.com or contact Cardinal's faxback service at
800-947-0808.
The Paul Allen Group was founded in 1994 to implement Paul
Allen's Wired World Strategy. It monitors performance of the companies
in which Allen holds a significant investment, provides strategic input
and business counsel and encourages the exchange of ideas between these
companies. Vulcan Ventures Inc. of Bellevue, Washington, was founded by
Paul Allen in 1986 to research and implement his investments. Allen's
investments through Vulcan are long-term, as his investment goals enable
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