[September 29, 2004]

Artisoft to Acquire Vertical Networks

BY JOHANNE TORRES

So everyone wants a star in the VoIP walk of fame these days. Joining the crowd comes Artisoft, Inc., announcing it just inked a deal to acquire privately held-Vertical Networks, Inc. Artisoft is getting ready to pay up a whopping $19 million in cash to acquire the IP-PBX software provider.

With the acquisition, Artisoft announced significant management shifts as Artisoft Chairman William Y. Tauscher will serve as chairman and chief executive officer, and Vertical Networks founder Scott K. Pickett will serve as chief technology officer, of the combined company. Other executives from Artisoft who will continue in their management positions include Duncan Perry, who directs administrative and financial operations as chief financial officer; Christopher Brookins, who leads the development of the TeleVantage product line as senior vice president of development; and Mel Passarelli, who manages sales and marketing as senior vice president of worldwide sales.

"The acquisition will bring together two fast-growing IP-PBX companies with established product offerings and a significant base of installed customers. Together with the IP telephony expertise and technology assets of the combined companies, and expanded channels for sales, integration and distribution, Artisoft will be well positioned to win customers and increase market share in its targeted vertical markets," said Tauscher. "We expect our product development and sales and marketing efforts will continue to be market-specific, consistent with our strategy of providing solutions tailored to the needs of different customer segments."

The combined company will have more than 150 employees. The headquarters will remain in Cambridge, MA with a significant development, sales and marketing presence in Sunnyvale, CA—home of Vertical Networks, Inc.

The key solutions involved in the merger are Artisoft’s TeleVantage and Vertical Networks’ InstantOffice—Artisoft will be combining both into its offering. TeleVantage is an open systems IP-PBX, call center solution and telephony application suite catering call centers and medium-sized businesses. The InstantOffice is a modular integrated IP-PBX communications platform targeted at large enterprise customers with remote, multi-site locations in the retail, pharmacy, financial services and healthcare vertical markets—including CVS/pharmacy, Household International, and Apria Healthcare.

"The combined product line strength: targeted applications focused on specific high-growth segments of the IP-PBX market, will be a powerful combination as legacy PBXs are replaced by IP-based solutions," said Scott K. Pickett. "It’s a key factor in recent aggressive revenue increases for both companies. We also see many distinct opportunities to merge technology to evolve and enhance our products."

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