Intel Acquires Dialogic Corporation for $780 Million

Strategic Insights -

As part of its strategy to expand in the multibillion-dollar networking and telecommunications market segment, Intel Corporation has acquired Dialogic Corporation for $780 million. The deal is aimed at strengthening Intel's position as a key supplier to the converging Internet and telecommunications industry by providing industry vendors with standards-based hardware and software building blocks for integrated voice and data networks.

Dialogic is a global leader in standards-based computer telephony software, network interfaces, and media processing boards that run on Intel-based servers. The company's products are used in voice, fax, data, speech recognition, call center management, Internet Protocol (IP) telephony, and enhanced services applications in both enterprise and service provider market segments. With this acquisition, Intel aims to make its servers the foundation of e-business and communications applications based on integrated voice and data networks.

Key Takeaways:

  • The acquisition is valued at approximately $780 million, with Intel offering $44 per share in an all-cash tender offer.
  • The deal is aimed at expanding Intel's standard-high-volume (SHV) server business in the multibillion-dollar networking and telecommunications market segment.
  • Dialogic will become a wholly owned subsidiary of Intel, reporting within Intel's Enterprise Server Group, and will continue to operate as before.
  • The company will focus on expanding its combined business by bringing to the communications industry the benefits of SHV server platforms, including faster time-to-market, a broader selection of applications, and lower deployment costs.
  • Dialogic employees will continue as employees of the new subsidiary, and the company does not anticipate any immediate changes to its product lines.
  • The acquisition is expected to create significant opportunities for Intel and Dialogic to collaborate on new technologies and solutions.
  • The deal has been approved by the Board of Directors of Dialogic and has received a unanimous recommendation from the company's Board of Directors.
  • Dialogic founders and board members holding approximately 33% of the outstanding shares have agreed to tender their shares in the offer.

Statistics:

  • The acquisition is valued at approximately $780 million.
  • Intel is offering $44 per share in an all-cash tender offer.
  • The deal is expected to create significant opportunities for Intel and Dialogic to collaborate on new technologies and solutions.
  • Dialogic has 1,200 employees worldwide.
  • The company had 1998 revenues of $294 million.
  • Dialogic has grown at an average compound annual growth rate of 25% in the past five years.

Sources:

  • Intel Corporation and Dialogic Corporation press release, June 7, 1999
  • Dialogic Corporation investor relations
  • Intel Corporation investor relations