ADC Telecommunications Acquires Pathway

Minneapolis-based ADC Telecommunications Inc. has entered into an agreement to acquire Pathway Inc., a manufacturer of ATM access products for high-speed voice, video, and data communications.

The acquisition will strengthen ADC's MPEG over ATM offerings, which are aimed at a market expected to grow from about $270 million today to more than $1 billion by 2004 according to market research firm Frost and Sullivan. The agreement is valued at approximately $20 million payable in cash. Closing is subject to satisfaction of certain agreed upon conditions.

The companies have been partner companies for nearly one year in co-developing the AccessPoint Universal Media Access (UMA) system, an ATM access product designed to transport multimedia over public or private high-speed, switched broadband networks. The system is optimized specifically for high-quality video, voice, and data transport applications and incorporates Pathway's AccessPoint product with ADC's Cellworx Service Transport Node and AAC ATM Access Concentrator. ADC estimates that AccessPoint combined with Cellworx can reduce a service providers network operating costs by as much as 40 to 50%.