Press Release

Monday, July 13, 1998 < Prev Next >

Visio Corp. Acquires Kaspia Systems Inc

Move Extends Visio's Commitment to Network Design and Documentation Tools Market

SEATTLE, July 13 /PRNewswire/ — Visio Corp. (Nasdaq: VSIO) today announced that it has acquired Kaspia Systems Inc., a privately held developer of fully automated enterprise-network audit functionality, including discovery, monitoring and reporting software, based in Beaverton, Ore.

Under the terms of the merger agreement, Visio acquired Kaspia for 482,985 shares of Visio stock, valued at approximately $23.3 million. This transaction will be accounted for as a pooling of interests and is expected to be slightly dilutive to earnings in the quarters ending Sept. 30, 1998, and Dec. 31, 1998. Visio will record a one-time charge of approximately $1.2 million for acquisition-related costs in the September quarter.

With this transaction, Visio has acquired the Kaspia network documentation tools and technology and will retain 15 Kaspia employees, including the entire Kaspia development team. Visio Corp. intends to incorporate the Kaspia autodiscovery technology into a future product offering, code-named "Venice," which is expected to ship before the end of 1998.

Addition of Kaspia Is Strategically Important

Visio Corp. has built its rapid success by providing increasingly meaningful solutions to its customers in its most vigorous growth markets. Kaspia's technology offers a significant increase in the depth and value of the solution Visio offers to some of its strongest customers — network managers and administrators — in companies of all sizes throughout the world.

"Since our introduction of Visio® Professional a year and a half ago, we've seen tremendous market response to our easy-to-use graphical solution for documenting networks of any scale," said Jeremy Jaech, president and CEO of Visio Corp. "Kaspia is an important investment for Visio. It will enable us to reach into, and beyond, our current installed base of network customers with new capabilities for automatically producing diagrams and tracking changes to enterprise networks."

"Merging the technologies of Visio and Kaspia will allow enterprise network managers to automate the first difficult step toward designing or adding to a network, which is to understand exactly what equipment is on their network and how it's configured," said Jeff Erwin, formerly president and CEO of Kaspia and now general manager of Visio's new Network Management Products business unit. "Visio users will be able to generate easily a detailed visual diagram of their entire network that can accurately identify and display logical connectivity and vendor- and model-specific information on every piece of equipment on their network, whether it's all in one building or all over the world."

Strong and Growing Market Need

The market is strong for network-management tools and for the subset of tools Visio is providing that allow logical-level network design, diagramming and documentation. According to Dataquest, the network management software market was $750.3 million in 1997 and is growing at a rate of 38 percent.

The need for these tools is being driven by rapid growth in the scale and complexity of networks, by the exploding need for Internet connections (which are now necessary for many people to do their jobs), and by the expansion of mission-critical applications being operated over networks. For Visio's tools, demand is great because they are easy to use and affordable by comparison to other tools in this space, allowing new or less highly trained people to immediately perform valuable tasks in network design, diagramming and documentation.

Visio's own network documentation tools, sold as Visio Professional and Visio Network Equipment, make up a fast-growing proportion of Visio's revenue. Visio also offers a free add-on for Visio Professional users, the Solution Pack for Novell Directory Services (NDS). Visio introduced its first solution specifically targeting the IT professional in the first quarter of 1997; as of the quarter ending March 31, 1998, Visio's products for this market now account for over 45 percent of the company's $76.7 million in revenue for the six-month period ending March 31, 1998. Visio currently has over 350,000 Visio Professional users; with the addition of the Kaspia technology to its product offering, Visio is well positioned to expand its presence in the network-design and documentation tools marketplace.

Kaspia, established in 1995, has provided fully automated enterprise network discovery, physical inventory, device auditing, trending and reporting software to the network monitoring, remote monitoring outsourcing and Internet service provider (ISP) markets. Kaspia technology is currently used to manage nearly 200 large-enterprise networks in 11 countries around the world.

Visio expects that nearly all of its current users who own both Visio Professional and Visio Network Equipment will find these tools, extended by the Kaspia technology, to be attractive.

Acquired Products and Technology

Currently available as an add-on product to Visio Professional, Kaspia Blueprint leverages Visio's intelligent graphics technology by integrating Kaspia's award-winning Enterprise Discovery Engine to deliver a unique and powerful autodiscovery and network diagramming solution. The integrated product enables network managers to accurately track the frequent changes to enterprise networks. The Discovery Engine operates at the LAN and enterprise level, automatically revealing both the physical and logical topological layouts of the network and how they are connected. All of the discovery information collected is available and easily accessible for building a network diagram within Visio.

Kaspia Network Audit Technology (KNAT) automatically discovers what devices are connected to a given network to measure how that network is performing and offers a completely new ability to track frame relay performance, allowing for a more detailed and accurate picture of a network. Within the Java-based Kaspia Report Center, users can view the reports available within KNAT or create their own.

Product Availability and Pricing

Customers can purchase Kaspia's Blueprint autodiscovery product directly from Visio for $495 by calling 800-248-4746, ext. 93W; it will also be available through Visio's normal distribution channel. Kaspia's Frame Relay discovery add-on will be available from Visio for $350; it requires both Visio Professional and Blueprint.

About Visio Corp.

Visio Corp. is the leading supplier of enterprisewide business diagramming and technical drawing software, with an installed base of over 2 million users worldwide. Founded in September 1990, the Seattle-based company pioneered the drawing and diagramming software market with the release of Visio 1.0 in November 1992 and has since released additional Microsoft Windows-based graphics applications that offer users a unique and effective way to communicate and work. Visio's powerful product line is becoming a worldwide standard for graphical solutions in business, with the support of partner programs and third-party relationships in key market segments. Visio products are available in as many as 11 language versions and are sold in more than 40 countries.

For more information about Visio Corp. and its products, customers can contact Visio at 800-24-VISIO (248-4746), ext. 93W, or visit the company's Web site at http://www.visio.com/.

This press release (including the quoted language above, the reference to the expansion of the network tools management market and Visio's expansion into this market, and the reference to establishment of Visio as a desktop platform standard) contains forward-looking statements. There are certain important factors that could cause actual results to differ materially from those anticipated by some of the statements made above. Among these are the company's ability to manage growth and integrate acquired technology, timing and customer acceptance of new products, fluctuations in quarterly performance, dependence on other products including Microsoft Windows, competition in the business drawing and diagramming software market, potential changes in licensing and marketing methods, and changes in general economic conditions. Additional information concerning these and other risks is described in the section entitled "Certain Risk Factors That May Impact Future Results of Operations" contained in the company's Annual Report on Form 10-K for the fiscal year ended Sept. 30, 1997, and, from time to time, in other reports filed by the company with the Securities and Exchange Commission.

NOTE: Visio and Kaspia are either trademarks or registered trademarks of Visio Corp. in the United States and/or other countries. All other trademarks, trade names or company names referenced herein are used for identification only and are the property of their respective owners.

SOURCE Visio Corp.

/NOTE TO EDITORS: Members of the media: Visio's news releases and other relevant materials can be retrieved from Visio's virtual pressroom at http://www.visio.com/pressroom/. To be notified via e-mail of breaking Visio news, send e-mail to visionews@wagged.com with your e-mail address in the body of the message./

/CONTACT: investors, Leslie Deitz of Visio Corp., 206-521-4546, or leslied@visio.com; or media, Susanne Buti, 425-637-9097, or sbuti@wagged.com, or Charlie Weiss, 425-637-9097, or charliew@wagged.com, both of Waggener Edstrom for Visio Corp./

/Company News On-Call: http://www.prnewswire.com or fax, 800-758-5804, ext. 107036/

/Web site: http://www.visio.com/

(VSIO)

CO: Visio Corp.; Kaspia Systems Inc. ST: Washington IN: CPR MLM SU: TNM

KF-DM — SFM062 — 6853 07/13/98 07:30 EDT http://www.prnewswire.com

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