Tut Systems agreed to acquire all of the outstanding shares of Copper Mountain Networks in a stock-for-stock transaction valued at approximately $10 million.
Tut Systems said it is acquiring Copper Mountain Networks primarily for its product and engineering resources, which will be refocused to address the expanding IPTV market opportunities. Tut Systems plans to incorporate Copper Mountain’s intellectual property and certain product elements into its growing video-centric product portfolio.
As a result of the transaction, Tut Systems will retain certain Copper Mountain employees from development centers in Palo Alto and San Diego and retain Copper Mountain’s San Diego facility. Tut Systems also said it will honor Copper Mountain’s existing customers’ support agreements.
In a separate, previously announced merger, Tut Systems has also agreed to acquire CoSine Communications, Inc. in a stock-for-stock transaction, and if approved by the stockholders of CoSine and Tut Systems, Tut Systems would issue approximately 6.0 million shares of its common stock to the shareholders of CoSine. Each transaction is expected to close in the second quarter of 2005, and each is subject to applicable stockholder approvals, and other customary closing conditions.
“We have witnessed an acceleration of the IPTV market opportunities world-wide and we wanted to accelerate, enhance and broaden our Multi-edge video content processing solution portfolio,” said Sal D’Auria, Chairman, President and CEO of Tut Systems.
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- In January 2005, Copper Mountain Networks, a supplier of broadband access equipment, initiated actions to lay off most of its remaining employees by March 22, 2005, retaining a limited team of employees to provide customer support and handle matters related to the ongoing exploration of strategic alternatives. At the time, the company said it was still pursuing the potential sale of its intellectual property.
- Copper Mountain’s VantEdge provides high-density interfaces for aggregation from T1/E1 for remote DSLAMs and access points, to OC-12/STM-4 and Gigabit Ethernet for video delivery to DSLAMs and PON OLT (Passive Optical Network Optical Line Termination) devices.
- In September 2004, CoSine initiated actions to wind down its operations. CoSine’s management team and its Board of Directors concluded that “maintaining the company’s existing employee headcount was not necessary for any of the strategic alternatives currently under consideration and the ongoing employee-related expenditures could potentially decrease total stockholder value.” CoSine had developed a carrier IP service switch featuring B-RAS capabilities.
