Israel’s AudioCodes (Nasdaq: AUDC) said on Monday that it bought selected assets from Nortel Networks (NYSE: NT) and would become an exclusive supplier for Nortel’s universal audio server (UAS) for three years.
AudioCodes, which makes voice over packet (VoP) technologies and systems, said it expected to complete the transactions contemplated in the agreement by the end of April 2003.
AudioCodes said it would pay $2 million as an up-front payment, another $2 million after six months, and another $1.5 million a year after the agreement closes.
In addition, AudioCodes will pay up to $12.5 million based on net orders for UAS products placed by Nortel over an 18-month period following the closing of the transaction.
The UAS product is designed to provide enhanced conferencing, multi-language announcement functionality, and other media server applications for voice over packet networks.
AudioCodes says it will leverage the UAS product and technology to further enhance its Media Server product line and to expand the sales of these products to network equipment providers (NEPs) and original equipment manufacturers (OEMs).
The deal includes a master OEM supply agreement covering a range of additional AudioCodes products, including the IPmedia 2000 Media server and the Mediant 2000 Media Gateway. Both products are expected to be rolled into various Nortel Networks voice over packet solutions, AudioCodes says.
The agreement calls for AudioCodes to pay an additional $1 million if Nortel completes the integration of the IPmedia 2000 solution into its Succession product.
Under the agreement, 20 Nortel Networks employees dedicated to the UAS business will transfer to AudioCodes' US subsidiary, AudioCodes Inc. The subsidiary will buy certain assets related to the development and support of the UAS product line.
In addition, Nortel Networks will grant to AudioCodes a license to the technology it uses in the UAS business. The parties plan to complete a development agreement for future platforms, under which AudioCodes will enhance its IPmedia 2000 Media Server platform based on UAS licensed software.
"We look forward to strengthening our already close relationship with Nortel Networks, one of the industry's leading telecommunications providers," said Shabtai Adlersberg, President and CEO of AudioCodes. "We anticipate this transaction and the subsequent sales of system products to Nortel Networks will establish AudioCodes as a leading equipment provider in the voice over packet market, and that it will further promote AudioCodes' systems business and partnerships with other leading telecommunications NEPs."
Founded in 1993, Yehud-based AudioCodes provides voice over packet media gateway and media processing technology and systems solutions. Its shares closed on Nasdaq on Monday at $3.08, reflecting a $120 million company value.
Published by Globes [online] - www.globes.co.il - on 8 April, 2003