Genesys Conferencing To Acquire Astound and Become a Leading Player in Web Conferencing

Business Wire, Dec 22, 2000

Business/High-Tech Editors

TORONTO, Ontario--(BUSINESS WIRE)--Dec. 22, 2000

Genesys S.A (Montpellier, France) to acquire 100% of the Canadian

Company Astound Incorporated (Toronto, Ontario)

This acquisition would solidify the close relationship that began in the early part of the summer when Genesys Conferencing and Astound signed an initial technological and commercial partnership. The partnership was strengthened this fall when Genesys Conferencing made a $5 million investment in Astound.

Based in Toronto and founded in 1996, Astound is a leading provider of solutions for real-time web conferencing, collaboration and streaming media broadcasts and enjoys an increasing share of this burgeoning market. The company's leading edge technology uniquely delivers a true multimedia user experience while meeting enterprise customers' toughest requirements by delivering the highest measure of reliability, content security and solution scalability. Leading corporations such as Hewlett-Packard, Lexmark, Minolta, NCR, DLJ Direct and many others have chosen Astound's web conferencing solutions. Further, Astound has received industry accolades from prestigious publications including Infoworld, ZDnet and TMC.

...to become one of the leading players in a market that is estimated to be almost $3 billion in 2005...

According to industry analysts from Wainhouse Research, the Web conferencing market is forecast to grow at a compounded annual rate of 89% through to 2005 to approximately $3 billion or around 26% of the world teleconferencing industry.

Given this growth rate, Astound represents a particularly synergistic benefit to Genesys Conferencing's large conferencing customer base. After the acquisition, Genesys Conferencing will be able to offer and control a fully integrated range of services of audio, video and Web conferencing to all its customers worldwide.

... and to strengthen its technological position in the Web conferencing market.

The acquisition of Astound would strengthen the Genesys Conferencing's technological market position and give it an advantage in providing next generation teleconferencing services. Genesys Conferencing will benefit from:

-- Direct control of one of the market's most innovative technologies;

-- The reinforcement of its Research and Development teams and development of
new expertise and synergies;

-- The enhancement of integrated services now offered via the Genesys
Conferencing's teleconferencing gateway: http://www.conferencing.com;

-- The addition of strong management to further enhance Genesys Conferencing's
team.

A strategic acquisition

The range of audio and video conferencing services, recently enhanced with rich media and to be completed by Astound' services in web conferencing and data collaboration, will be deployed in 14 countries. After the closing of the previously announced Vialog transaction and its integration, the Genesys Conferencing sales force of 250 would market the enhanced range of conferencing services to the 16,000 customers of the Group worldwide.

For Genesys Conferencing, the integration of the technology developed by Astound is projected to lead to significant gross margins improvement from Web conferencing services. Genesys Conferencing expects that in 3 years these services will represent a material percentage of total sales.

"The combination of our leading Web conferencing technology and the world's leading independent teleconferencing specialist will catapult us to the forefront of the Web conferencing market." stated Kailash Ambwani, Chairman and CEO of Astound. "This merger brings together one of the industry's most promising technologies and Genesys Conferencing's huge worldwide distribution capability."

"The acquisition of Astound is a major step in the growth of Genesys Conferencing. Astound is going to help Genesys Conferencing become one of the leading players in virtual IP communication. It fits in perfectly with the Group's strategy, which is to prepare for the future through the development, acquisition and full integration of the most innovative technologies in order to offer all our customers a full range of interactive communication services," said Francois Legros, Chairman and CEO of Genesys Conferencing.

Acquisition details

The purchase price consists of 1 million Genesys shares and $7 million in cash, payable at closing, subject to a "collar" and to certain adjustments for expenses and warrants and options proceeds.

Key employees and large shareholders of Astound have agreed to a lock-up on the sale of the Genesys shares which they will receive for periods ranging from 30 to 180 days.

Genesys Conferencing and Astound have agreed that Genesys Conferencing will endeavor to sell certain non-core Astound assets and share 50% of the net proceeds with Astound shareholders.

Genesys Conferencing expects the closing to take place in the first quarter of 2001 and this acquisition to be accretive on a cash basis within one year. The closing of the acquisition is subject to the approval of a Plan of Arrangement by Astound shareholders and the approval by Genesys Conferencing shareholders of the issuance of the necessary Genesys Conferencing shares to implement the Plan of Arrangement.