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Mindspeed(R) to Acquire Carrier Ethernet Aggregation MAC Product Portfolio

Posted on: Wednesday, 5 September 2007, 09:02 CDT

Mindspeed Technologies, Inc. (NASDAQ:MSPD), a leading supplier of semiconductor solutions for network infrastructure applications, today announced that it entered into an agreement on Sept. 4, 2007 to acquire the product portfolio and intellectual property assets of Ample Communications, Inc., an innovative developer of Ethernet media access controller (MAC) products for carrier Ethernet aggregation applications.

Mindspeed will pay approximately $4.6 million in cash to acquire the assets in a private foreclosure sale from Ample's senior creditor and expects to complete the transaction before the end of its current fiscal quarter subject to the satisfaction of various closing conditions. The company expects revenues from the acquired products to contribute approximately $3 million in its fiscal year 2008 with margins generally in line with the corporate average. The company does not expect any impact to its non-GAAP operating profitability in the first half of fiscal 2008 and expects the acquisition to be accretive in the second half of fiscal 2008 when the acquired products are expected to contribute more meaningful revenues.

Ample's products ship to major OEM equipment customers for installation in Ethernet metropolitan, access, and enterprise networks, including wireless/cellular backhaul and Ethernet-over-SONET applications. Mindspeed intends to market, sell and support these Ethernet aggregation products with densities ranging from two to 24 ports and Ethernet transmission speeds from 10 Mbps to 10 Gbps. The company also expects to develop and further extend the Ethernet MAC product line.

"With this acquisition Mindspeed will enter a strategic new market segment which we believe will significantly diversify our WAN portfolio," said Raouf Halim, chief executive officer of Mindspeed. "These products are in production and ship to a number of tier-one OEM customers for use in next-generation Ethernet switches, routers, and access devices for both carrier and enterprise applications."

"With our network infrastructure expertise, strong customer support and global sales force, we expect to begin building a strong position in the Ethernet aggregation market once this acquisition is completed," said Ron Cates, senior vice president and general manager of Mindspeed's WAN business unit.

About Mindspeed Technologies®

Mindspeed Technologies, Inc. designs, develops and sells semiconductor networking solutions for communications applications in enterprise, access, metropolitan and wide area networks.

The company's three key product families include high-performance analog transmission and switching solutions, multiservice access products designed to support voice and data services across wireline and wireless networks, and WAN communications solutions including T/E carrier physical-layer and link-layer devices, as well as ATM/MPLS network processors.

Mindspeed's products are used in a wide variety of network infrastructure equipment including voice and media gateways, high-speed routers, switches, access multiplexers, cross-connect systems, add-drop multiplexers and digital loop carrier equipment.

To learn more, visit us at www.mindspeed.com

Safe Harbor Statement

This press release contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include, but are not limited to, statements regarding the pending transaction to acquire certain assets of Ample Communications, Inc. and the opportunities it provides; the timing for completion of the transaction; the timing and amount of revenue contribution; the impact on margins and profitability and the timing of any such impact; intentions to market, sell and support products; expectations to develop and further extend the Ethernet MAC product line; beliefs that the company will significantly diversify its WAN portfolio; and expectations to begin building a leading position in the Ethernet aggregation market. These forward-looking statements are based on management's current expectations, estimates, forecasts and projections and are subject to risks and uncertainties that could cause actual results and events to differ materially from those stated in the forward-looking statements. These risks and uncertainties include, but are not limited to: the satisfaction of the conditions to closing the pending transaction; the status of the assets and the conduct of Ample's business in the period between signing and closing; the condition of the assets delivered upon closing; the employment of key personnel; the company's ability to successfully integrate the Ample products and assets and further extend certain product lines; cooperation of Ample's suppliers and customers; the company's ability to obtain any third-party consents required for assignment of certain assets; intellectual property infringement claims; claims of Ample's creditors; litigation; pricing pressures and other competitive factors; economic, credit and capital market conditions and various circumstances that could cause the company's entry into the Ethernet aggregation market to be delayed or terminated. The company can provide no assurances regarding the pending transaction, including without limitation whether it will be completed when anticipated or at all, the timing and amount of revenue and earnings contribution, if any, and any incremental operating expense that will result, and whether the transaction's effects will meet the company's expectations. Risks and uncertainties that could cause the company's actual results to differ from those set forth in any forward-looking statement are discussed further under "Risk Factors" and Mindspeed to Acquire Carrier Ethernet MAC Aggregation Product Portfolio 3 "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Form 10-Q, for the period ended June 30, 2007, as well as similar disclosure in the company's other SEC filings. Forward-looking statements contained in this press release are made only as of the date hereof, and the company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

Source: Business Wire

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