Nortel Networks to Acquire EPiCON

Nortel Networks today announced its intent to enter an acquisition agreement with EPiCON, Inc.

Under terms of the agreement, , Nortel Networks will provide EpiCon, Inc. , with $275 million in Nortel Networks common shares.

Based on a determined price of Nortel share of approximately $55.15, the acquisition will result in Nortel Networks issuing approximately 4.99 million shares on a fully diluted basis. The deal is expected to close late third quarter or early fourth quarter.

Once the acquisition is complete, EPiCON will become part of Nortel Networks ASP Market business unit. Nortel currently owns nine percent of EPiCON after a minority investment last year.

“Nortel Networks has the vision of where the ASP market is going, and a strategy to take it there,” said Jack Sweeney, EPiCON president and chief executive officer. “We see this acquisition as the ideal way to bring our technology to the global marketplace and accelerate the mass market adoption of application services.”

EPiCON (Chelmsford, MASS) has developed innovative software that enables ASPs to profitably deploy, install, manage and update software to thousands of desktops from a central server.

This software will become a part of Nortel Networks Preside Managed Application Services Platform, an open and extendable software-based solution that will enable service providers to quickly and cost-effectively roll out and manage multiple eBusiness and other software applications for their customers.

This solution will benefit service providers through enhanced operational efficiencies, offering cost-effective and high performance access for end users to a broad new set of software applications.

Poised to grow rapidly, Nortel Networks believes it will further accelerate the growth of the ASP market by providing solutions that deliver new revenue and profit opportunities to service providers.

With the Preside Managed Application Services Platform, Nortel Networks will have the first-mover advantage with an application and service management solution for this dynamic market.

According to the companies, the Preside Managed Application Services Platform combined with EPiCON’s software will give the network the intelligence and management capability that the ASP model has been searching for. This will allow service providers to cost effectively scale their businesses and deliver a complete suite of eBusiness and enterprise applications to companies of all sizes.

EPiCON’s unique technology, which extends application management all the way to the desktop, will be a key differentiator in Nortel Networks’ OSS for the ASP and hosting markets.

The technology will enable service providers to deliver applications to the desktop, assure their operation with self-healing capabilities, and automatically handle software distribution and revision control to Windows-based desktops. It will be compatible with leading systems management tools and complements the Nortel Networks ASP and hosting portfolio comprised of network and Internet Data Center infrastructure, hosted applications, professional services and Nortel Networks Preside service and network management.