Nortel to acquire Clarify for $US2.1 billion

Nortel Networks has agreed to pay $US2.1 billion in shares to acquire Clarify, which makes front-office software for managing customer relationships.

Nortel said the deal would allow it to offer software that helps businesses build a single view of a customer's experience across sales, marketing, and service, using data from a variety of sources including the telephone, faxes and the Web.

These capabilities will help businesses anticipate and respond to customer needs, personalise interactions, and increase customer loyalty, according to Nortel.

If the transaction is completed, Clarify will become a wholly owned subsidiary of Nortel Networks and retain its headquarters in San Jose, California. Tony Zingale, the company's president and chief executive officer, will continue to lead the company.

The transaction has been approved by the boards of directors of both companies, and is expected to close in the first quarter of 2000. It isn't expected to affect Nortel Networks' earnings per share in calendar 2000, and should be accretive in 2001, excluding acquisition-related charges in both cases, Nortel said.

Clarify shareholders will receive a fixed exchange ratio of 1.3 Nortel Networks common shares for each share of Clarify common stock. Based on the closing price of $US52.69 per common share of Nortel on October 15, this represents $68.49 per share of Clarify and an aggregate price of $US2.1 billion for the common shares of Clarify on a fully diluted basis.

Separately, Clarify reported third quarter revenues of approximately $62 million to $63 million. Revenues for the company's fiscal year 1998 were $130.5 million. The company has almost 800 employees in the Americas, Europe and Asia.

Clarify's flagship product is called eFrontOffice, and its customers include British Telecommunications, Compaq and General Electric.

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