Verso Technologies (Nasdaq: VRSO) is expected to acquire substantially all the business assets of Clarent Corp. of Redwood City, CA, for approximately $9.8 million consideration in a combination of cash and notes.
At this time, Verso says it has arranged to fund this acquisition using debt financing.
As part of the agreement, Clarent is expected to file for voluntary reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Northern District of California in San Francisco.
“Given the current state of the telecom industry, litigation and other obligations facing Clarent, the Board of Directors has determined a sale of assets to Verso offered the best available option for our company and our customers,” President James B. Weil said in a statement. “The agreement with Verso is expected to offer Clarent’s current product line a safe, synergistic and financially strong home and ensure that product development and service can continue. The Chapter 11 filing will provide Clarent with the time and means needed to resolve its legal issues, while maintaining normal business operations.”
Wiel added that Clarent products and support will be available during the reorganization period. Daily operations at Clarent’s NetPerformer and Softswitch business units also will carry on as usual, he said.
The transaction is expected to close and the assets to transfer to Verso within ninety days.
In the meantime, Clarent product development and support as well as product shipment and sales are expected to continue as usual.
Clarent, founded in 1996, is a provider of softswitch and enterprise convergence solutions for next generation networks.
Verso, based in Atlanta, provides integrated switching solutions for communications service providers who want to develop IP-based services with PSTN scalability and quality of service.