News | May 25, 1999

Texas Micro To Merge With Radisys

Texas Micro Inc. and RadiSys Corp. have announced the signing of a definitive agreement under which Texas Micro will be acquired by RadiSys for stock valued at approximately $115 million. RadiSys is a leading global supplier of embedded computing solutions for telecommunications, automation, and other industries. Texas Micro is a leader in the design, production, and integration of open system computing platforms for telecom, Internet, and industrial applications.

"In communications equipment being designed today, the leading architectures are PCI and CompactPCI," stated Dr. Glen Myers, chairman and CEO of RadiSys. "Texas Micro is strong in PCI, with an extensive offering of CPU cards and system packaging. We can now combine this with RadiSys' PCI DSP voice-processing products and WAN communications adapters from the ARTIC business. RadiSys has the leading position today in CompactPCI, with CPU solutions, DSP boards, voice processing, and WAN interfaces. Texas Micro adds CompactPCI system packaging and high-availability fault-tolerant developments. The extraordinary fit of our capabilities and technologies gives us a truly unique position - a far broader and deeper offering than any other company, and significant value added in such applications as cellular base stations, switches, PBXs, routers, edge devices, remote access servers, voice gateways, voice-message systems, video conferencing, and computer telephony."

Under the agreement, Texas Micro will become a wholly-owned subsidiary of RadiSys and will operate as the RadiSys Communications Platform Division. The sales forces of the two companies will be combined into a single organization, taking advantage of Texas Micro having a larger field sales force in Europe and RadiSys having the same in Japan.

Shareholders of Texas Micro will exchange four shares of Texas Micro for one share of RadiSys, subject to certain adjustments based on the RadiSys stock price at closing. If the price is between $32 and $40, the exchange ratio will be such that a fixed value of eight dollars is paid per Texas Micro share. If the RadiSys share price is greater than $40, five Texas Micro shares will be exchanged for one of RadiSys. The transaction will be accounted for as a pooling of interests, and is subject to approval by shareholders of both companies, normal regulatory approvals, and other customary closing conditions. The transaction is expected to be consummated in approximately 90 days and is expected to be accretive for calendar year 2000.