Filed by Conexant Systems, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: GlobespanVirata, Inc.
Commission File Number: 000-26401-73
Conexant Systems, Inc. and GlobespanVirata, Inc. intend to file
with the SEC a joint proxy statement/prospectus and other relevant documents in
connection with the proposed transaction. Investors and securityholders of
Conexant and GlobespanVirata are urged to read the joint proxy
statement/prospectus and other relevant material when they become available
because they will contain other information about Conexant, GlobespanVirata and
the proposed transaction. Investors and securityholders may obtain a free copy
of these materials (when they are available) and other documents filed with the
SEC at the SEC's web site at www.sec.gov. A free copy of the joint proxy
statement/prospectus when it becomes available may also be obtained from
Conexant Investor Relations at 4000 MacArthur Boulevard, Newport Beach,
California 92660 and GlobespanVirata at 100 Schulz Drive, Red Bank, New Jersey
07701.
Conexant and its executive officers and directors may be deemed to
be participants in the solicitation of proxies from Conexant stockholders with
respect to the proposed transaction. Information about the directors and
executive officers of Conexant and their ownership of Conexant shares is set
forth in the proxy statement for Conexant's 2003 Annual Meeting of Shareowners.
A free copy of this document may be obtained by contacting the SEC or Conexant
as indicated above. Investors and securityholders may obtain additional
information regarding the interests of such directors and executive officers in
the proposed transaction by reading the joint proxy statement/prospectus when it
becomes available.
THE FOLLOWING IS A JOINT PRESS RELEASE DISSEMINATED BY CONEXANT SYSTEMS, INC.
AND GLOBESPANVIRATA, INC. ON NOVEMBER 3, 2003.
Conexant Contacts: GlobespanVirata Contact:
----------------- -----------------------
Editorial Editorial
Gwen Carlson Mariam Azzam
(949) 483-7363 (732) 345-6018
Investor Relations
Bruce Thomas
(949) 483-2698
CONEXANT AND GLOBESPANVIRATA ANNOUNCE PLAN TO MERGE
Combination Will Create the Worldwide Leader in
Semiconductor Solutions for the Broadband Digital Home
NEWPORT BEACH, Calif. and RED BANK, New Jersey, Nov. 3, 2003 - Conexant
Systems, Inc. (Nasdaq: CNXT) and GlobespanVirata, Inc. (Nasdaq: GSPN) today
announced the signing of a definitive agreement to combine the two companies in
a strategic merger. The combined company will possess the world's most complete
and most advanced portfolio of semiconductor solutions targeting the broadband
digital home.
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"Conexant has been focused exclusively on delivering the technology and
products that are driving the digital home, one of the semiconductor industry's
most exciting and highest-growth opportunities," said Dwight W. Decker, Conexant
chairman and chief executive officer. "With the addition of GlobespanVirata's
highly complementary product portfolio, we gain key end-to-end digital
subscriber line connectivity with a leading position in central office
applications worldwide. We also benefit by adding GlobespanVirata's leadership
position in wireless local area networking, a critical technology for the
digital home.
"From a financial perspective, we have the opportunity to capture
significant operating efficiencies, and we anticipate that the merger will be
accretive within six to nine months from the close of the transaction," Decker
continued. "Together, we will have the scale and scope to make the necessary R&D
investments for continued innovation leadership in wired and wireless
communications and multimedia applications for the digital home."
"Combining GlobespanVirata with Conexant allows us to complement our
leadership in broadband communications capabilities with leadership in broadband
media processing capabilities, including broadcast video encoders and decoders
as well as digital set-top box system solutions for cable, satellite,
terrestrial data and digital video networks," said Armando Geday, president and
chief executive officer of GlobespanVirata. "I am confident that the new merged
company will deliver stronger financial performance and create more value for
our shareholders, customers and employees than either company could operating
independently."
"This merger will result in the creation of a new company with the
management expertise, talent resources, technology, market positions, and
critical mass to succeed in an increasingly competitive industry," said Matt
Rhodes, Conexant's president.
About the Combined Company
Armando Geday will serve as chief executive officer of the company and
Matt Rhodes will be president. Dwight Decker will assume the role of chairman.
The board of directors of the combined company will have 12 members,
with Conexant designating seven directors, including Decker, and GlobespanVirata
designating Geday and four others.
Based on the market values of the individual companies on October 31,
2003, the merged company would be valued at approximately $2.8 billion, and it
would have an annual revenue run-rate of approximately $1.2 billion. The
combined company will retain the Conexant name and its stock will continue to
trade on the Nasdaq national market under the ticker symbol "CNXT." The merged
company will employ approximately 2,400 people worldwide and will be
headquartered in Red Bank, New Jersey at GlobespanVirata's current headquarters.
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About the Transaction
Under the terms of the merger agreement, which has been unanimously
approved by the boards of directors of both companies, GlobespanVirata
shareholders will receive 1.198 shares of Conexant common stock for each share
of GlobespanVirata stock. Based on the fully diluted share counts for the two
companies as of market close on Friday, October 31, 2003, current Conexant
shareholders will own 62.75 percent and current GlobespanVirata shareholders
will own 37.25 percent of the combined company's shares. The transaction is
subject to customary closing conditions, including shareholder and regulatory
approvals, and is expected to be completed in the first quarter of calendar
2004.
About the Digital Home
With always-on broadband connections, the Internet becomes an integral
part of everyday life, and the semiconductor products and technology that make
the broadband digital home possible allow people to access, share and display
information and entertainment on a variety of consumer electronics devices in a
seamless fashion.
At the heart of today's digital home is a network that provides users
with broadband Internet access and links devices such as personal computers,
printers and game consoles cohesively and transparently, using both wired and
wireless technologies. In the near future, information and entertainment
networks will connect additional products including personal digital assistants,
digital cameras, MP3 players, and other handheld appliances. With the
commercialization of new technologies that enable the distribution of
high-quality digital video and audio content, broadband digital home networks
will expand to include stereos, set-top boxes, televisions, and home security
and automation systems.
Note to Editors, Analysts and Investors
The Conexant and GlobespanVirata merger conference call will take place
on Monday, November 3, 2003, at 8:30 a.m. EST. To listen to the conference call
via telephone, please call (866) 710-0179 (domestic) or 334-323-9854
(international); security code: Conexant. To listen via the Internet, please
visit the investor relations section of Conexant's Web site at
www.conexant.com/ir. Playback of the conference call will be available 30
minutes after the conclusion of the call on Conexant's Web site at
www.conexant.com/ir or by calling (800) 858-5309 (domestic) or (334) 323-7226
(international); access code: 40983, pass code: 46324. Callers will need both
the access code and pass code to listen to the replay.
About Conexant
Conexant's innovative semiconductor system solutions are driving
digital home information and entertainment networks worldwide. The company has
leveraged its expertise and leadership position in modem technologies to enable
more Internet connections than all of its competitors combined, and continues to
develop leading integrated silicon solutions for cable, satellite, terrestrial
data and digital video networks.
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Key products include digital subscriber line (DSL) and cable modem
solutions, home network processors, broadcast video encoders and decoders,
digital set-top box components and systems solutions, and dial-up modems. The
company also offers a suite of wireless data and networking components solutions
that includes HomePlug(R), HomePNA(TM) and WLAN (802.11) components and
reference designs.
Conexant is a fabless semiconductor company and has approximately 1,400
employees. The company is headquartered in Newport Beach, Calif. To learn more,
visit Conexant at www.conexant.com.
About GlobespanVirata
GlobespanVirata is a leading provider of broadband communications
solutions for consumer, enterprise, personal computer and service provider
markets. GlobespanVirata delivers complete system-level high-speed,
cost-effective and flexible DSL and wireless networking chip sets, software and
reference designs to leading global manufacturers of broadband access and
wireless networking equipment. The company's products include broadband
system-level solutions for modems, routers, residential gateways, and DSLAMs, as
well as a wide variety of wireless networking chip sets and reference designs
that are enabling a new generation of wireless connectivity in notebooks, PDAs,
digital cameras, MP3 players and other handheld networking appliances.
GlobespanVirata applies the industry's longest history in DSL and
wireless networking development and deployment to offer unparalleled support to
its more than 400 customers in bringing its proven broadband and wireless
networking solutions to market. GlobespanVirata is headquartered at 100 Schulz
Drive, Red Bank, New Jersey 07701 and can be reached at +1-732-345-7500.
Safe Harbor Statement
This press release contains statements relating to future results of
Conexant and GlobespanVirata (including certain projections and business trends)
that are "forward-looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
projected as a result of certain risks and uncertainties. For each of Conexant
and GlobespanVirata, these risks and uncertainties include, but are not limited
to: the cyclical nature of the semiconductor industry and the markets addressed
by the company's and its customers' products; demand for and market acceptance
of new and existing products; successful development of new products; the timing
of new product introductions; the availability of manufacturing capacity;
pricing pressures and other competitive factors; changes in product mix; product
obsolescence; the ability to develop and implement new technologies and to
obtain protection for the related intellectual property; the uncertainties of
litigation; and, in the case of GlobespanVirata, the integration of its Wireless
Networking Products Group, as well as other risks and uncertainties, including
those detailed from time to time in Conexant's and GlobespanVirata's Securities
and Exchange Commission filings. Such risks also include costs related to the
proposed merger; failure to obtain the required approvals of Conexant and
GlobespanVirata stockholders; risks that the closing of the transaction is
substantially delayed or that the transaction does not close; and the risk that
Conexant's and GlobespanVirata's businesses will not be integrated successfully.
These forward-looking statements are made only as of the date hereof, and
Conexant and GlobespanVirata undertake no obligation to update or revise the
forward-looking statements, whether as a result of new information, future
events or otherwise.
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Additional Information
Conexant and GlobespanVirata intend to file with the Securities and
Exchange Commission (the "SEC") a registration statement on Form S-4 that will
include a joint proxy statement/prospectus and other relevant documents in
connection with the proposed transaction. Conexant and GlobespanVirata will mail
the joint proxy statement/prospectus to their respective investors and
securityholders. Investors and securityholders of Conexant and GlobespanVirata
are urged to read the joint proxy statement/prospectus and other relevant
materials when they become available because they will contain other information
about Conexant, GlobespanVirata and the proposed transaction. Investors and
securityholders may obtain a free copy of these materials (when they are
available) and other documents filed with the SEC at the SEC's website at
www.sec.gov. A free copy of the joint proxy statement/prospectus when it becomes
available may also be obtained by contacting Conexant Investor Relations at 4000
MacArthur Boulevard, Newport Beach, California 92660 and through Conexant's
website at www.conexant.com, or by contacting GlobespanVirata at 100 Schulz
Drive, Red Bank, New Jersey 07701 and through GlobespanVirata's website at
www.globespanvirata.com.
Conexant, GlobespanVirata and their respective executive officers and
directors may be deemed to be participants in the solicitation of proxies from
their respective stockholders with respect to the proposed transaction.
Information about the directors and executive officers of Conexant and their
ownership of Conexant shares is set forth in the proxy statement for Conexant's
2003 Annual Meeting of Shareowners. A free copy of this document may be obtained
by contacting the SEC or Conexant as indicated above. Information about the
directors and executive officers of GlobespanVirata and their ownership of
GlobespanVirata stock is set forth in the proxy statement for GlobespanVirata's
2003 Annual Meeting of Stockholders. A free copy of this document may be
obtained by contacting the SEC or GlobespanVirata as indicated above. Investors
and securityholders may obtain additional information regarding the interests of
such directors and executive officers in the proposed transaction by reading the
joint proxy statement/prospectus when it becomes available.
# # #
Conexant is a trademark of Conexant Systems, Inc. HomePlug is a registered
trademark of the HomePlug Powerline Alliance, Inc. and HomePNA is a trademark of
the Home Phoneline Networking Alliance. PRISM is a registered trademark and the
GlobespanVirata name and logo are trademarks of GlobespanVirata, Inc. Other
brands and names contained in this release are the property of their respective
owners.
6
THE FOLLOWING IS THE SCRIPT OF A TELEPHONE CONFERENCE CALL WITH ANALYSTS AND
OTHERS HELD ON NOVEMBER 3, 2003.
Conference Call Coordinator
I would like to introduce Bruce Thomas, Executive Director of Investor Relations
for Conexant, who will chair this morning's conference call.
Bruce
Thank you operator.
Good morning everyone and welcome to a very special joint Conexant and
GlobespanVirata conference call. I hope that by now you have all had an
opportunity to review the joint press release issued by Conexant and
GlobespanVirata this morning.
Joining me today on the call are Dwight Decker, Chairman and Chief Executive
Officer of Conexant, Armando Geday, President and Chief Executive Officer of
GlobespanVirata, and Matt Rhodes, the President of Conexant.
Dwight will begin today's call with an introduction to the information contained
in the joint press release followed by an overview and his perspective. Then
7
Armando will provide his perspective on the information, and Matt will follow
with his thoughts. Finally, Dwight will provide closing comments after which
we'll open the lines for your questions.
Please note that our comments today will include statements relating to future
results that are forward looking statements as defined in the Private Securities
Litigation Reform Act of 1995. Actual results may differ materially from those
projected as a result of certain risks and uncertainties, including but not
limited to those noted in our joint press release and those detailed from time
to time in each company's SEC filings.
I will now turn the call over to Dwight to begin today's prepared comments.
Dwight
Thank you Bruce.
I am pleased to announce that Conexant and GlobespanVirata signed a definitive
agreement today that will combine the two companies in a strategic merger. This
is an outstanding combination that results in a company that is unique in scope
and breadth of technology and that will possess the world's most complete and
8
most advanced portfolio of semiconductor solutions targeting the broadband
digital home.
Those of you familiar with Conexant's strategy know that we have been focused
exclusively on delivering the technology and products that are driving the
digital home, one of the semiconductor industry's most exciting and
highest-growth opportunities. With the addition of GlobespanVirata's highly
complementary product portfolio, we gain key end-to-end digital subscriber line
connectivity with a leading position in central office applications worldwide.
We also benefit by adding GlobespanVirata's leadership position in wireless
local area networking, a critical technology for the digital home.
From a financial perspective, we have the opportunity to capture significant
operating efficiencies, and we anticipate that the merger will be earnings
accretive to Conexant within six to nine months from the close of the
transaction.
Additionally, we will together have the scale and scope to make the necessary
R&D investments for continued innovation leadership within our addressed
markets. We are convinced this will enable stronger long-term revenue growth
than either company could achieve on its own.
9
Armando Geday will serve as Chief Executive Officer of the combined company and
Matt Rhodes will be its President. I will serve as the merged company's
Chairman.
As you may know, Armando and I worked together for more than five years before
Conexant was spun off from Rockwell International. I have always been impressed
by his talents and skills and know him as a highly competent business leader.
Since becoming the CEO of Globespan in 1997, he has done an outstanding job in
building GlobespanVirata into a very successful company addressing the
communications semiconductor market. I am confident that Armando will be a
highly effective chief executive of the merged company.
I am also very pleased that Matt Rhodes will assume the role of President in the
new and expanded Conexant. Matt and I have worked closely together for the past
six years, and Matt's experience and in-depth knowledge of the technologies,
products and customers in our space have been vital to Conexant's success. I am
confident that Matt will do an exceptional job of leading the business units for
the new merged company.
10
The new Conexant is fortunate to have two such outstanding leaders with the
considerable talents of Armando and Matt.
With respect to governance, we will establish a new twelve-member Board of
Directors for the combined company, with Conexant designating seven directors,
including myself, and GlobespanVirata designating five directors, including
Armando.
Based on Friday's closing market prices of Conexant and GlobespanVirata, the
merged company would be valued at approximately $2.8 billion dollars and would
have an annual revenue run-rate of approximately $1.2 billion dollars. The
combined company will retain the Conexant name and its stock will continue to
trade on the NASDAQ national market under the ticker symbol "CNXT." The merged
company will employ approximately two-thousand four hundred people worldwide and
will be headquartered at GlobespanVirata's current Red Bank, New Jersey,
location.
Under terms of the agreement, which has been unanimously approved by the boards
of directors of both companies, GlobespanVirata shareowners will receive 1.198
shares of Conexant common stock for each share of GlobespanVirata stock
11
already owned. Based upon the fully diluted share count of both companies as of
the market close on Friday, current Conexant shareholders will own approximately
62.75 percent and current GlobespanVirata shareholders will own approximately
37.25 percent of the merged company's shares on a fully diluted basis.
The transaction is subject to customary closing conditions, including
shareholder and regulatory approvals, and we expect to complete the transaction
before the end of the first calendar quarter of 2004.
I would now like to turn the call over to Armando Geday for his thoughts on the
merger.
Armando
Thank you Dwight.
GlobeSpan started out as a small company targeting the DSL market. Thanks to the
focus and commitment of the people that made up our teams, we successfully grew
into a global leader in DSL applications.
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With our recent addition of the Intersil wireless business, we have added an
important extensible platform to address new applications and to deliver lower
system cost and higher functionality solutions to our customers. Our plan is to
extend this wireless expertise into adjacent wireless data markets and to
leverage this technology platform to drive other WLAN enabled applications. With
Globespan entering the WLAN market we have expanded our market opportunity many
fold.
Combining GlobespanVirata with Conexant allows us to complement our leadership
in broadband communications capabilities with leadership in broadband media
processing capabilities, including broadcast video encoders and decoders as well
as digital set-top box system solutions for cable, satellite, terrestrial data
and digital video networks. And in merging the talented Conexant and
GlobespanVirata teams, the combined company will have more than sixteen hundred
engineering and technical marketing employees from our twenty-four hundred
worldwide employees focused exclusively on developing products for the broadband
digital home.
I am confident that the new merged company will deliver stronger financial
performance and create more value for our shareholders, customers and employees
13
than either company could operating independently. In particular, we will be the
clear leader in both broadband and narrowband access, as well as in wireless
networking, and will have a strong and growing position in digital media
processing.
In terms of customers, the combined organization will have proven partnerships
with all of the critical customers shaping the future of the digital home.
In summary, I am very pleased to have the opportunity to assume the chief
executive role for this impressive new company.
I will now turn the call over to Matt Rhodes for his perspective on the
transaction.
Matt
Thank you Armando.
The merger of Conexant and GlobespanVirata will result in the creation of a new
company with the management expertise, talent resources, technology and market
positions and critical mass to achieve a higher level of joint success in an
increasingly competitive industry.
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A particular example of an expanded horizon made possible through this merger is
the accelerated integration of wireless LAN as an embedded function in an entire
range of digital home products. Through the integration of GlobespanVirata's
advanced wireless LAN technology into digital media applications, the new
Conexant could dramatically expand the networking of video throughout the
digital home, realizing a portion of our long-term vision.
By adding the substantial engineering and technical marketing resources of
GlobespanVirata to those of Conexant, the combined company can not only
strengthen our current product roadmap, but will also have the opportunity to
redeploy technical resources to selectively accelerate key next generation
initiatives.
In closing, I feel fortunate that I will be assuming the presidency of this
significant new company.
I would now like to turn the call back over to Dwight for a closing comment.
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Dwight
Thank you Matt.
Before we open the lines for questions, I would like to reiterate how excited
Armando, Matt and I are about the future prospects for the new combined company.
Operator, we're now ready to open the lines for the question and answer session.
Conference Call Coordinator
Ladies and gentleman, should you have questions and comments...
{Q&A}
Conference Call Coordinator
Mr. Decker, at this time there are no more questions in the queue.
Dwight
Thank you Operator.
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That concludes our conference call today. On behalf of both the Conexant and
GlobespanVirata management teams, thank you for your participation in this
special call this afternoon. We look forward to updating you on our performance
and the progress of our transaction next quarter.