MetaSolv to Acquire OSS Assets of Nortel Networks

MetaSolv Software Inc. (www.metasolv.com) signed a deal to purchase the assets of Nortel Networks (www.nortelnetworks.com) Service Commerce Operation Support System (OSS) Business for approximately $35 million in cash and the assumption of certain liabilities on closing. The comprehensive software portfolio, including service activation, extends MetaSolv's global position in fulfillment solutions for Internet protocol (IP), data, wireless, and traditional networks and services.

MetaSolv, a global leader in management solutions for next-generation and traditional communications networks and services, announced the agreement today to acquire these assets.

"With the acquisition, MetaSolv has expanded its fulfillment product portfolio, and is positioned to offer the most comprehensive and industry-tested fulfillment solution available," said Elisabeth Rainge, director of network and service management for analysis firm International Data Corp. (IDC, www.idc.com).

"This transaction also is an important milestone for the communications software industry," Rainge said. "We believe service providers will benefit as software leaders focus their expertise on service management solutions, as hardware providers re-focus on core competencies."

MetaSolv's combined product suite now will address service providers' key priority in today's economic environment: maximizing investments in existing network technologies, while realizing increased revenues and reduced operational costs from higher margin IP-based and wireless services.

With the acquisition, MetaSolv adds a carrier grade service activation solution to the MetaSolv Solution product suite. The extended product portfolio enables service providers to simplify the costly and complex process of delivering value-added communications services over new packet-based technologies such as IP VPN, Gigabit Ethernet, ATM/Frame Relay, MPLS, and 2.5G/3G wireless, as well as traditional circuit-switched networks.

The acquisition includes software assets of Architel Systems, which was acquired by Nortel Networks in 2000, and certain additional assets of Nortel Networks service management and business management OSS groups.

With this acquisition, MetaSolv's combined product suite addresses service providers' key priority in today's economic environment: maximizing investments in existing network technologies, while realizing increased revenues and reduced operational costs from higher margin IP-based and wireless services.

"Acquiring these Nortel Networks OSS assets gives us the additional products, expanded global customer base, and the market reach to immediately position MetaSolv as the world's definitive OSS industry leader for planning and delivering IP, data, and wireless services," said Jim Janicki, MetaSolv's CEO. "With the expanded product suite, MetaSolv can offer service providers scalable, end-to-end fulfillment solutions that help them profitably deliver traditional and next-generation services."

The acquisition positions MetaSolv to enhance its leadership position in the market for service fulfillment software solutions, which The Yankee Group (www.yankeegroup.com) estimates will reach $7 billion by 2004.

In addition, MetaSolv and key strategic systems integration partners are well positioned for the professional services market, which is estimated to reach $4 billion by 2004.

Highlights of the acquisition include:

1.) MetaSolv adds a significant number of major global communications industry leaders to its global customer base, accelerating the timetable for achieving the company's strategic globalization goals.

2.) The expanded product suite complements the other two key operational areas, Assurance and Billing, and enables service providers to differentiate their product offerings for IP, data, mobile wireless, and basic transport services.

3.) Service providers will benefit as software leaders focus their expertise on service management solutions, as hardware providers re-focus on core competencies.

4.) Fulfillment solution leadership.

The transaction will be accounted for using the purchase accounting method and is expected to close by early next month. MetaSolv expects that this acquisition will be accretive to cash earnings per share in the second half of fiscal 2002 and beyond. Credit Suisse First Boston advised Nortel Networks.

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