ADC sells Metrica unit to WatchMark-Comnitel

The last, and some analysts say best, of ADC’s software assets will be sold to Bellevue, Wash.-based WatchMark-Comnitel, according to an agreement announced today between the companies.

ADC has sold other assets over the last year including its Singl.eView customer care and billing platform to Intec Telecom Systems. ADC also sold its FastFlow Broadband Provisioning Manager (acquired from CommTech in 2001) and its Cuda cable termination system to BigBand Networks, in which it retained a financial interest.

WatchMark, once owned by Lucent Technologies, merged with Comnitel in November of 2003. The company provides network monitoring and management solutions to wireless service providers. For $35 million in cash and 3.2 million shares of WatchMark-Comnitel common stock, the company will assume control of the Metrica service assurance software offerings including approximately 250 employees, related facility space and relationships with existing software customers.

The stock will provide ADC with an ownership stake in WatchMark-Comnitel of less than 5%. The purchase price for the transaction consists of $35 million in cash and 3.2 million shares of WatchMark-Comnitel common stock, which represents less than 5% ownership of the company. The transaction is expected to close in approximately 60 days and is subject to customary closing conditions including price adjustments.

David Heaps, senior vice president and general manager of the Metrica business unit, will become president and chief operations officer of WatchMark-Comnitel.

ADC will now focus exclusively on its core infrastructure business. The company said the impact of excluding Metrica earnings should be negligible. In ADC's fiscal year, which ended Oct. 31, 2003, Metrica generated sales of approximately $30 million and an operating income of approximately $5 million, after direct expenses only. In the first three-quarters of ADC's fiscal year, Nov. 1, 2003 to July 31, 2004, Metrica sales were approximately $21 million with an operating loss of approximately $2 million, after direct expenses only.

The applications within Metrica include the Metrica Performance Manager, which provides a complete view of network quality and usage; Metrica Service Manager, which enables the delivery of new services; Metrica Service Assurance Framework, a modular and open framework that ensures Metrica solutions support innovation and competitive differentiation; and Metrica/NPR, which allows users to manage data from multiple vendors and forecast performance trends.

The combined company will create the largest worldwide installed base of wireless service assurance products, according to a WatchMark-Comnitel spokeswoman.