Newbridge to Acquire Stanford Telecommunications

Kanata, ON-based Newbridge Networks has signed a definitive agreement to acquire Stanford Telecommunications Inc. (STII: Sunnyvale, CA). The boards of directors of the companies have approved an agreement and plan of merger, subject to conditions including approval by Stanford Telecom's stockholders, whereby Newbridge will acquire all of the outstanding shares of common stock of Stanford Telecom in a tax-free, stock-for-stock exchange.

After proceeds from the divestiture of unrelated businesses, the Stanford Telecom acquisition is expected to have a net cost to Newbridge of approximately US$280 million. The parties expect to close the transaction by November of this year.

Under the agreement Stanford Telecom stockholders will receive for each share of common stock US$30 in Newbridge stock plus a contingent value right (CVR) which will give them a participation in the proceeds on the sale of other operations above a minimum amount. This participation will also be payable in the form of Newbridge common shares. The CVR may have a value of up to US$5 per share.

Upon closing, Newbridge intends to retain the Wireless Broadband Products group, which currently forms part of Stanford Telecom's wholly-owned subsidiary Stanford Telecom Wireless Broadband Inc., and other associated groups, which are presently held in Stanford Telecom's Base Business Operations. Stanford Telecom and Newbridge have agreed that Stanford Telecom's other operations, including SATCOM Ground Systems, Communications Systems Integration, Applied Technology Operation, Advanced Communications Systems, and Manufacturing and Quality Assurance, will be sold to third parties.