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Telecommunications systems

Lucent Technologies to Acquire International Network Services for $3.7 Billion

Strategic Insights

— 2 min read

Lucent Technologies, a leading designer and builder of networks and communications systems, has announced the signing of a definitive agreement to merge with International Network Services (INS). The acquisition, valued at approximately $3.7 billion, is expected to strengthen Lucent's position in the rapidly growing professional services and support market for communications networks. Under the terms of the agreement, each share of INS will be converted into 0.8473 shares of Lucent, based on Lucent's closing stock price of $63-5/8 on August 9.

The merger is expected to be completed during Lucent's first quarter of fiscal 2000, and will be accounted for as a pooling of interests. Lucent expects the merger to be neutral to earnings in fiscal 2000. The combined company will offer customers the industry's deepest portfolio of network planning, design, integration, maintenance and management solutions.

Key Takeaways:

  • Lucent Technologies will acquire International Network Services (INS) for approximately $3.7 billion.
  • The merger is expected to strengthen Lucent's position in the rapidly growing professional services and support market for communications networks.
  • INS will significantly expand Lucent's NetCare offerings with enhanced network design and consulting capabilities and nearly a decade of Internet protocol integration experience.
  • The combined company will offer customers the industry's deepest portfolio of network planning, design, integration, maintenance and management solutions.
  • John Drew, currently president and chief executive officer of INS, will lead the combined organization of 5,500 people.
  • The market for services and support for communications networks is estimated to be growing at more than 16 percent annually from $96 billion in 1999 to $153 billion in 2002.
  • INS' revenues grew at five times the market rate in fiscal 1999, reaching 25.8% annual growth.
  • INS has more than 50 of the Fortune 100 companies, one-third of the Fortune 1000, and many established and emerging telecommunications service providers and technology vendors as customers.
  • The combined company will offer industry-leading software solutions for managing and optimizing application-ready networks.

Statistics:

  • The market for services and support for communications networks is estimated to grow at more than 16 percent annually from $96 billion in 1999 to $153 billion in 2002.
  • INS' revenues grew at an impressive 25.8% annual growth in fiscal 1999.
  • INS had approximately 2,169 employees and provided service from 43 locations as of June 30.
  • The combined company will have 5,500 employees and will operate from 43 locations.

Sources:

  • "Lucent Technologies to Acquire International Network Services for $3.7 Billion" PRNewswire, August 10, 1999
  • Lucent Technologies' press release, August 10, 1999
  • International Network Services' website, http://www.ins.com
  • Lucent Technologies' website, http://www.lucent.com

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