Micromuse Acquires Calvin Alexander Networking

Micromuse Inc., a provider of fault and service-level management software, has signed an agreement to acquire New York City-based Calvin Alexander Networking Inc. (CAN), a privately-held company that develops network auto-discovery technology.

The acquisition will provide Micromuse with auto discovery and root-cause analysis technology required by next-generation service providers and enterprises. These capabilities form the foundation for automated network management systems that broaden the market for network management solutions. The combined companies will provide the ability to manage complex network infrastructures more efficiently.

"This acquisition underscores our commitment to enhancing and extending our product portfolio to meet the growing needs of our service provider customers," said Greg Brown, Chairman and CEO of Micromuse. "After extensive research, an exhaustive evaluation of competitive products, and rigorous testing of the CAN solutions at customer sites, we have concluded that CAN’s patent-pending technology is an order of magnitude superior to all other alternatives on the market. Our acquisition of CAN will provide our NETCOOL(r) product line with the most cutting-edge network discovery technology available today."

Internet service providers (ISPs), application service providers (ASPs), interexchange carriers (IXCs), competitive local-exchange carriers (CLECs), CATV operators and large corporations are rapidly expanding their voice and Internet infrastructures to meet growing demand. As a result, there is a critical need for software that accurately discovers network topology in real-world networks and compensates for misconfigurations, unmanaged devices, and moves/adds/changes as they occur. During network failures or service disruptions, the ability to accurately trace physical communications paths is essential in helping network operations centers quickly isolate and repair problems. CAN offers core technology for solving these common problems.

"CAN has a patent-pending methodology for discovering dynamic multi-layer topologies," notes Michael Wood, Chairman and CEO of CAN. "The highly modular CAN software combines physical topology to the port level, with layer 2 and layer 3 logical topology, providing accurate path information for routed and switched networks, including VLANs and VPNs. We have been working with Micromuse for some time to extend the range of technologies the CAN software is able to discover. Throughout this process it became crystal clear that our two companies shared the same vision and passion for solving advanced network management problems. Given our technical and cultural compatibility, we are very excited about combining forces with the fault and service-level management industry leader to help next-generation service providers maximize the value of their network infrastructure."

Under terms of the acquisition agreement, Micromuse will issue approximately $42 million worth of its common stock to acquire Calvin Alexander Networking. The transaction is to be accounted for under the purchase method of accounting and is to be treated as a tax-free reorganization for federal income tax purposes. The transaction has been approved by both companies’ Boards of Directors and is subject to approval of Calvin Alexander Networking’s stockholders, and other customary closing conditions. Certain agreements have been made to promote the retention and motivation of CAN employees. A portion of the consideration for the transaction is subject to a one-year lock-up agreement and a one-year price guarantee.

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