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To: 2MAR$ who wrote (2748)6/1/1999 12:14:00 PM
From: David Sirk  Read Replies (1) of 4828
This has direct impact on IVOC!!!

Intel Bid For Dialogic Eyes Telecom Markets

By Eric Auchard

NEW YORK (Reuters) - Intel Corp. (Nasdaq:INTC - news), the world's
leading maker of computer chips, Tuesday said it had agreed to pay $780
million to acquire Dialogic Corp. (Nasdaq:DLGC - news), the No. 1
supplier of equipment that merges phone and fax functions into computers.

Intel and Dialogic said they had agreed to a deal in which Intel would pay $44 cash per Dialogic
share in a tender offer, representing a nearly 32 percent premium to the closing price of Dialogic
stock Friday.

Following news of the deal, Dialogic shares were up $10.12 to $43.50 in mid-morning trading on
the Nasdaq stock market. Intel stock was down $1.12 to $52.94, also on Nasdaq.

Intel said the transaction would expand its business selling high-volume servers -- computers used
to manage networks of other computers -- in the multibillion-dollar office network and
telecommunications markets. Dialogic products act as building blocks for linking voice and data

''This merger strengthens Intel's position as a key supplier to the converging Internet and
telecommunications industry,'' Craig Barrett, Intel president and chief executive, said in a

The acquisition of Dialogic is the latest in a string of deals by Intel to bolster its position in the
converging voice and data communications markets. The transaction opens the door for Intel to
the burgeoning telecommunications equipment market, building on its historic roots as the world's
top computer chip maker and its growing role as a network equipment supplier.

Already this year, the Santa Clara, Calif., company has agreed to pay $3.5 billion to buy Level
One Communications Inc. (Nasdaq:LEVL - news), a supplier of networking chips, and $180
million to buy Shiva Corp., a maker of network access equipment.

''Our goal is to make Intel-based servers the foundation of e-business and communications
applications based on integrated voice and data networks,'' Barrett said.

Under the deal, Dialogic will become a wholly-owned unit within Intel's Enterprise Server Group.
Dialogic employees will continue as employees of the new unit.

No layoffs or immediate changes to product lines are expected, John Landau, Dialogic vice
president of marketing, said in an interview, although he noted that over time, Intel may consolidate
purchasing and other corporate functions.

Dialogic was founded in 1983 and has 1,200 employees worldwide. Its 1998 revenues totaled
$294 million.

More than 90 percent of the company's revenues come from computer hardware add-on boards
composed of Dialogic software and an array of computer chips, Landau said. These systems are
inserted into server computers to enable phone calls, voice messages, faxes, speech recognition
and other voice communications to be routed over office networks. The equipment is also used by
phone companies to provide functions like prompting services that tell callers when a number listing
has changed.

Dialogic said its board had approved a definitive merger agreement and had recommended that
Dialogic stockholders tender their shares to Intel. Closing of the deal is subject to regulatory
approval, customary closing conditions and acceptance by holders of a majority of Dialogic

The offer for Dialogic's 16.9 million outstanding shares is to begin June 7 and end July

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