RadiSys ® Corporation (NASDAQ:RSYS), a leading provider of innovative hardware and software platforms for next generation IP-based wireless, wireline and video networks, announced today that it closed the acquisition of Continuous Computing Corporation. The Company previously announced that it had entered into a definitive agreement to acquire Continuous Computing on May 3, 2011. Continuous Computing, now a wholly-owned subsidiary of RadiSys, develops communications systems consisting of highly integrated ATCA platforms and Trillium protocol software coupled with software Professional Services to complement their full solution offering. Their key customer applications include 3G and 4G Wireless infrastructure, Small Cell base stations, Traffic Management, Internet Offload and Network Security.
Strategic and Financial Benefits
The Company believes the acquisition transforms RadiSys into a larger global market leader in embedded hardware and software for communications networks with unmatched scope, scale and expertise. The acquisition is expected to accelerate the Company’s strategy to deliver more differentiated platforms and solutions. Continuous Computing also brings expansion into high growth markets with many new customers, creating meaningful customer diversification. The acquisition benefits both Companies’ customers with a broader set of technologies and solutions including a combined set of ATCA platforms that are now developed and supported by a global team with greater scale and capability.
The acquisition is expected to expand the Company’s revenues, profitability and EPS with the addition of Continuous Computing’s approximately 50 percent gross margin Next Generation products. The combination is also expected to meaningfully expand the Company’s non-GAAP gross margin rate to the high 30’s by the end of 2012. The Company expects that the combined organization will benefit from economies of scale and meaningful expense and cost efficiencies in 2012 and beyond.The Company intends to provide further information on the timing and amount of the expected significant expense synergies, the combined Company’s financial projections for 2011 and 2012, along with updates on the overall integration plans during the Company’s second quarter earnings conference call, currently expected to be on Thursday, July 28, 2011 at 5:00 p.m. ET. The conference call information will be provided in a separate press release.
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