Zoom Telephonics To Purchase Tribe Computer Works
Launches Zoom Into Remote Access
Systems Market Boston,
MA, June 17, 1996 - Zoom Telephonics (NASDAQ: ZOOM),
a high-volume manufacturer of faxmodems and other personal
computer communications products, today announced that it
has entered into an agreement to purchase substantially all
of the assets and to assume limited liabilities of Tribe Computer
Works, Incorporated, a privately held California corporation.
Founded in 1990, Tribe Computer designs, produces, and
markets remote access systems and routers for branch office
environments. The company initially developed switching hub
products including the TribeStar™, and in 1995 began
shipping its line of eight-port and two-port TribeLink™
remote access products. These products generated most of Tribe's
approximately $4 million in revenues in 1995. Tribe's products
have been well-reviewed, and are noted for their ease of installation,
superior price/performance, and intuitive Internet-based management
software - WebManage™. "This purchase is
a great strategic fit for Zoom Telephonics," said Frank
Manning, Zoom's President. "It accelerates us into the
remote access systems market, which grew approximately 120%
last year. We plan to couple Tribe's remote access and router
technology with our modem and ISDN capabilities to create
powerful, easy-to-use products that link local area networks
to the Internet and to remote users. Remote access products
fit well into our Zoom Business Products line, which also
includes the Zoom/MultiLine Faxmodem products and advanced
single-line faxmodems targeted to the Value Added Reseller
market. In the future we also expect to move remote access
products in high-volume through the retail channel, where
Zoom already has significant brand equity and shelf space."
"This was more than a technology acquisition," said
Manning. "We're also very impressed with the Tribe team,
and we can leverage their talents with Zoom's financial, engineering,
marketing, sales, and production strengths."
"We have looked carefully at a number of options for
entering the remote access market, including in-house development,
OEM purchases, and other acquisitions," said Eugene Chang,
Zoom's Vice President of Strategic Business Development, "and
we are excited about the potential of Tribe's hardware and
software technology." The transaction will be
accounted for using the purchase method and is scheduled to
close later this month. Zoom will issue shares of its common
stock to Tribe in exchange for the purchased assets. The exact
number of shares to be issued will be based upon the purchase
price to be paid to Tribe and the closing price of Zoom's
common stock on the day prior to the closing of the transaction.
The purchase price is subject to adjustment based upon the
value of purchased inventory and equipment on the date of
closing. A registration statement covering the purchase shares
has been filed with the Securities and Exchange Commission.
Zoom expects the cost of the acquisition and related
expenses to reduce net income less than 10% during the second
half of 1996. "Considering our prospects for growth in
the remote access systems market, this investment should yield
a substantial return in 1997 and beyond," said Manning.
Zoom Telephonics designs, produces, and markets products
that link people and their personal computers through the
world's largest network, the international telephone network,
and connected networks including the Internet and corporate
local area networks. The Zoom Internet Web Site is
www.zoomtel.com
The Tribe Web Site is www.tribe.com
This press release contains certain forward-looking
statements, including without limitation statements relating
to the effect of the acquisition on Zoom's business, prospects,
and results of operations. These forward-looking statements
involve risks and uncertainties, including that Zoom will
not be able to successfully integrate and exploit Tribe's
business and technology, that the costs and expenses relating
to the acquisition will not be higher than anticipated by
Zoom, and other risks and uncertainties indicated from time
to time in Zoom's filings with the Securities and Exchange
Commission. |