Telocity

Apr 15, 2013

.." The Free Library. 2000 Business Wire 03 Jun. 2015 http://www.thefreelibrary.com/Hughes+to+Acquire+Telocity+in+%24180+Million+Cash+Deal%3b+Expands...-a068313819 Chicago style: The Free Library. S.v. Hughes to Acquire Telocity in $180 Million Cash Deal; Expands Nationwide Broadband Services Capability.." Retrieved Jun 03 2015 from http://www.thefreelibrary.com/Hughes+to+Acquire+Telocity+in+%24180+Million+Cash+Deal%3b+Expands...-a068313819 APA style: Hughes to Acquire Telocity in $180 Million Cash Deal; Expands Nationwide Broadband Services Capability.. (n.d.) >The Free Library. (2014). Retrieved Jun 03 2015 from http://www.thefreelibrary.com/Hughes+to+Acquire+Telocity+in+%24180+Million+Cash+Deal%3b+Expands...-a068313819 Business Editors & Internet Writers EL SEGUNDO, Calif. & CUPERTINO, Calif.--(BUSINESS WIRE)--Dec.21, 2000 Combined with DIRECTV, High-Speed Internet Service Creates Whole House Entertainment and Information Solution HUGHES Electronics Corp., the world's leading provider ofdigital television entertainment, satellite services and satellite-basedprivate business networks, and Telocity Inc., (Nasdaq:TLCT), a leadingnational provider of broadband services via digital subscriber lines (DSL), today announced that Hughes will acquire Telocity for $2.15 pershare in cash, or a total purchase price of approximately $180 million. The boards of directors of both companies have approved thetransaction. With the addition of Telocity's existing DSL-based network,HUGHES will significantly expand its ability to offer Internet andbroadband services to consumers throughout the United States. TheTelocity network will complement the HUGHES nationwide DirecPC(R)broadband service via satellite, which is announcing the availability ofits new "two-way" satellite service this week. With the acquisition of Telocity, HUGHES will be the country'sfirst provider to offer on a national basis a portfolio of consumerentertainment and information services that includes digitalmultichannel television, and wired and satellite broadband Internetaccess. "This acquisition is strategically important for HUGHES andfor DIRECTV," said HUGHES chairman and CEO Michael T. Smith. "We currently offer DirecPC as our primary nationwide Internet andbroadband offering, but the projected demand for broadband exceeds ourexisting capacity to deliver it by satellite. "With the addition of Telocity, we achieve nearly unlimitedcapacity, and can offer our customers a choice of DSL where it isavailable, and two-way satellite broadband in circumstances wherecustomers prefer satellite delivery or where DSL is not and will not beavailable. " "With proprietary technology and a nationwide footprint,Telocity has become an innovator and leader in providinglifestyle-enhancing broadband services to our subscribers," saidPatti Hart, president and CEO of Telocity Inc. "We are proud to join the HUGHES family, and this is anextraordinary opportunity for us. Together, we will provide acomprehensive suite of services that will challenge the competition andenhance our customers' lives. Together, we will be stronglypositioned to be leaders in the exploding broadband market. " Following the necessary government approvals and completion of thetransaction, HUGHES will integrate the broadband delivery capabilitiesof Telocity with DIRECTV(R), the nation's leading provider ofdigital multichannel entertainment, to create a "whole house"entertainment and information solution that can deliver digital videoand high-speed data throughout the home for existing and future DIRECTVcustomers on a nationwide basis. "By bundling Telocity's capabilities with thehigh-quality offerings of DIRECTV, we will offer consumers the best ofboth worlds -- digital satellite entertainment and high-speed DSLInternet access -- through a single portal into their homes," saidEddy W. Hartenstein, senior executive vice president of HUGHES. "We will initially target the new service to DIRECTV'sexisting base of more than 9 million customers, and then leverage ournationwide distribution network to market a bundled video and broadbandservice offering to prospective customers at retail. " Hartenstein added that the bundled service offering is expected toprovide DIRECTV with the opportunity to further increase customersatisfaction and retention, and increase revenue per household. HUGHES also expects to benefit in the future from the synergies ofhaving a single, nationwide home service network installing DIRECTV,DirecPC, and Telocity DSL, and from a "single point ofcontact" customer service organization for the future digitaltelevision or broadband needs of DIRECTV customers. Telocity of Cupertino, has an expandable service network thatcurrently extends across 140 U.S. metropolitan areas, which account for40 percent of the country's population. As the availability of DSLincreases to encompass more communities, Telocity's services willbecome available to a larger population. Telocity has developed a proprietary in-home gateway unit that isself-installable on a home computer and configures itself without theneed of a network interface card, or an in-home service call. Thegateway enables customers to purchase additional services such as datasecurity, automatic backup, home networking and Internet Protocol telephony. In November, Telocity became the first residential DSL servicesprovider to offer a package of value-added services to its customers toenable home networking and increased computer security. Telocity's plug-and-play capability enables Internet accesswith typical download speeds of 500 Kbps (kilobits per second) to 1.5Mbps (megabits per second), and upload, such as for sending e-mail, of128 to 256 Kbps. Telocity's broadband services and home gateway technology alsocomplement DIRECTV's television-based interactive services, such asAOLTV and UltimateTV, by providing home networking functionality andspeeding up the Internet connection. The unique capabilities ofTelocity's home gateway can be integrated into a DIRECTV receiver. Additionally, the Telocity network can be supplemented by NET-36, aservice that enables bandwidth-rich content providers to bypass theInternet congestion that slows down transmission speeds and causessignificant video quality distortion. The broadcast of digital andstreaming media over NET-36 will be near digital television quality,with the same high fidelity that the content providers intended. NET-36 is part of PanAmSat Corp., which owns and operates theworld's largest network of geostationary-orbiting satellites.PanAmSat is 81 percent owned by HUGHES. DirecPC was developed by HUGHES Network Systems and provides userswith secure and reliable broadband services via satellite. The DirecPCsystem is used by such Internet providers as AOL, Juno and EarthLink toprovide rich multimedia content and features to consumers through thePowered by DirecPC service. DIRECTV, HUGHES Network Systems and PanAmSat are operatingbusinesses of HUGHES, a unit of General Motors Corp. The earnings ofHUGHES are used to calculate the earnings per share attributable to theGeneral Motors Class H common stock (NYSE:GMH). Telocity is a leading nationwide provider of integrated residentialbroadband services. Telocity improves today's dial-up, ornarrowband, experience through faster and reliable services that enhanceInternet surfing, shopping and communications. Telocity intends toexpand its broadband services to packaged value-added services that mayinclude secure telecommuting, home monitoring and automation, voicebundling and entertainment services. Telocity currently provideshigh-speed broadband services through DSL technology. As Telocityexpands its services nationwide, the company intends to choose the mostreliable, flexible and cost-effective broadband access technologies(including DSL, cable and wireless) available in each local market. Formore information, contact Telocity at phone 408/863-6600; fax408/777-1451; www.telocity.net, or mail at 10355 N. DeAnza Blvd. ;Cupertino, Calif. 95014. Media and Analysts Conference Calls HUGHES and Telocity are holding several conference calls to discusstoday's announcement. Telocity will conduct a call with analysts at 10 a.m. EST today.Reporters are invited to participate in a listen-only mode. The call-innumber is 719/457-2661. The call will be available on replay for 30 daysat 719/457-0820 (passcode 643606), and via webcast at www.telocity.netin the Investors' Section. HUGHES will conduct a call with analysts at 11 a.m. EST today.Reporters are invited to participate in a listen-only mode. The call-innumber is 719/457-2630 (confirmation code 693343). The call will beavailable on replay until 1 a.m. EST Dec. 29. The replay number is719/457-0820 (confirmation code 693343). A live webcast will also beavailable and archived for 30 days at www.hughes.com. HUGHES and Telocity will also host a media question and answersession from 12:30 p.m. to 1:30 p.m. EST today. Non-media canparticipate in a listen-only mode. Available for questions on the call will be: -- Michael T. Smith, chairman and CEO of HUGHES-- Eddy Hartenstein, senior executive vice president of HUGHES-- Patti Hart, president and CEO of Telocity. The call-in number is 719/457-2681, and the confirmation code is736906. The call will be available on replay until 1 a.m. EST Dec. 29.The replay number is 719/457-0820 with the same confirmation code. Acquisition Details Under the terms of the agreement, a corporation recently formed byHUGHES will make a tender offer to purchase all currently outstandingshares of common stock of Telocity at a price of $2.15 per share incash. The tender offer will be subject to certain conditions, includingthe tender, without withdrawal prior to the expiration of the offer, ofat least a majority of Telocity's outstanding shares on a fullydiluted basis and receipt of all necessary governmental approvals.Stockholders representing a majority of the outstanding shares ofTelocity have irrevocably committed to tender their shares in the tenderoffer. The tender offer, which is expected to commence by Feb. 1, 2001 andexpire no later than April 2, 2001, unless extended, will be followed bya second step merger in which those shares not tendered will beconverted into the right to receive the same $2.15 per share in cash.Also, to provide interim funding to Telocity, HUGHES has agreed toadvance up to $20 million prior to completion of the tender offer.Following completion of the tender offer, HUGHES will be entitled todesignate a majority of the Board of Directors of Telocity. If 90percent of the outstanding shares of Telocity common stock are tenderedand purchased pursuant to the offer, the second step merger can becompleted thereafter without a vote or meeting of Telocity'sstockholders. Telocity stockholders are advised to read the tender offerstatement and the solicitation/recommendation statement regarding theacquisition referenced in this news release, which will be filed withthe Securities and Exchange Commission upon the commencement of thetender offer. The tender offer statement (including an offer topurchase, letter of transmittal and related tender offer documents) andthe solicitation/recommendation statement will contain importantinformation which should be read carefully before any decision is madewith respect to the offer. Telocity stockholders may obtain a free copyof the tender offer statement and the solicitation/recommendationstatement when it is available and other documents filed by HUGHES andTelocity with the SEC at the SEC's Web site at www.sec.gov. Thetender offer statement and the solicitation/recommendation statement andthese other documents may also be obtained by Telocity stockholderswithout cost to them from HUGHES and Telocity. Safe Harbor HUGHES Electronics Corp. believes that some of the foregoingstatements may constitute forward-looking statements. When used in thisreport, the words "estimate," "plan,""project," "anticipate," "expect,""intend," "outlook," "believe" and othersimilar expressions are intended to identify such forward-lookingstatements and information. Important factors that may cause actualresults of HUGHES to differ materially from the forward-lookingstatements in this report are set forth in the Form 10-Ks filed with theSEC by GM and HUGHES. Telocity states that investors are cautioned that statements thatare not strictly historical constitute forward-looking statements,including, without limitation, statements regarding value-added servicesand the expectations thereof, current or future financial performance,management's plans and objectives for future operations, productplans and performance, management's assessment of market factors,and statements regarding the strategy and plans of Telocity and itsstrategic partners. In accordance with the Private Securities LitigationReform Act of 1995, important factors that could cause Telocity'sactual results to differ materially from those expressed or implied bysuch forward-looking statements include but are not limited to thepending acquisition of Telocity by Hughes, the highly competitive andevolving nature of the broadband market, the successful deployment ofTelocity's rollout plans and strategies, customer demand forTelocity's services in target markets, the pricing environment forTelocity's basic and value-added services, and the success of thecompany's strategic relationships. Readers are encouraged to reviewTelocity's recent filings with the Securities and ExchangeCommission, including Telocity's current quarterly report on Form10-Q, Registration Statement on Form S-8, prospectus filed under Rule428(b)(4), final amended Registration Statement on Form S-1, and itsother filings with the Securities and Exchange Commission, copies ofwhich may be accessed through the SEC's Web site athttp://www.sec.gov. Descriptions of risk factors are not intended to becomplete. COPYRIGHT 2000 Business Wire No portion of this article can be reproduced without the express written permission from the copyright holder. Copyright 2000, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company. Reader Opinion