News RoomFor immediate release GE Spacenet to merge with Gilat MCLEAN, VA, September 28, 1998 Gilat Satellite Networks Ltd. (NASDAQ: GILTF) of Petah Tikva, Israel and GE American Communications (GE Americom) of Princeton, New Jersey announced today that GE Capital Spacenet Services, Inc. (GE Spacenet) will become a wholly-owned subsidiary of Gilat. The new entity, to be called Spacenet, Inc. (Spacenet), will continue to support all of GE Spacenet's product lines as well as its 120 customers in 41 countries, making Gilat one of GE Americom's largest customers. Spacenet products, stationery and literature will display the GE logo together with the Gilat logo for the next three years. Under the terms of the merger agreement, GE Americom will receive five million newly-issued shares equal to approximately 30 percent of Gilat's outstanding shares and will become Gilat's largest single shareholder, with two out of seven seats on Gilat's Board of Directors. The deal is subject to the approval of Gilat shareholders and governmental authorities, including the U.S. Department of Justice and the U.S. Federal Communications Commission for transfer of control of certain permits and licenses. "Gilat has been Spacenet's primary product provider since Spacenet's inception," said John F. Connelly, Chairman and Chief Executive Officer of GE Americom. "We have chosen Gilat as our partner based on its strong product development, and superior quality and manufacturing capabilities." Connelly continued, "The combined company will have superior reach, distribution and product position which will allow it to compete successfully in any part of the world. The merger combines Gilat's outstanding development skills and hardware expertise with Spacenet's software capabilities and network operating strengths." Gilat Chairman and Chief Executive Officer Yoel Gat explained, "The merger of Spacenet into Gilat will create a vertically-integrated, globally-competitive firm focused purely on VSATs. These strengths should help us realize our goal of becoming the world's leading VSAT company." "This deal is expected to be non-dilutive in 1999 and accretive in 2000," added Gat. "We believe that the strong alliance between GE Americom and Gilat, coupled with the existing service infrastructure in Spacenet, will position the combined company to prosper from emerging broadband Internet applications and services." Gilat has scheduled a teleconference for the financial community today at 11:00 am Eastern. In order to participate, please dial 1-800-946-0741 from within the US, or 1-719-457-2649 from outside the US, and refer to confirmation code #544176. GE Spacenet is a world leader in providing global communications networks and services. With headquarters in McLean, Virginia, GE Spacenet is a wholly-owned subsidiary of GE American Communications, Inc. (GE Americom), a GE Capital company. With over 20 years of experience, GE Americom is one of the world's largest satellite operators and a pioneer in satellite distribution of television programming. GE Americom operates 11 satellites providing satellite-based solutions for North America, Europe, the Middle East and now, with the planned launch of GE-1A, Asia. In South America, GE Americom is an equity investor in the NahuelSAt satellite system. With the planned launch of GE-1A in 1999, GE Americom's satellite services will be able to reach 80 percent of the world's population. GE Capital, with assets of over US$250 billion, is a global, diversified financial services company with 28 specialized businesses. A wholly-owned subsidiary of General Electric Company, GE Capital Services, based in Stamford, Connecticut, provides equipment management, mid-market and specialized financing, specialty insurance and a variety of consumer services, such as car leasing, home mortgages and credit cards, to businesses and individuals around the world. GE is a diversified manufacturing, technology and services company with operations worldwide. Gilat Satellite Networks Ltd. designs, develops, manufactures, markets and supports Very Small Aperture Terminal (VSAT) satellite earth stations and related hub equipment and software. Gilat products are incorporated into telecommunications networks that provide satellite-based communications between a central location and a large number of geographically dispersed sites. The Company offers a range of products: Skystar Advantage(TM), a joint development of GE Spacenet and Gilat, enables interactive, transaction-oriented applications. ISAT(R) facilitates frame-relay delivery of voice and data. FaraWay(TM) VSAT offers multi-channel, toll-quality telephone, fax and data services. DialAway(R) VSAT allows for one- to three-channel, telephone and fax service to rural communities. SkySurfer(TM) VSAT delivers interactive corporate communications; SkyBlaster(TM), when incorporated into the SkySurfer system, provides a satellite return path. OneWay(TM) VSAT provides unidirectional data broadcasts. In December 1996, Gilat acquired Skydata Inc., a Florida-based VSAT company specializing in the paging and data broadcast markets. As of May 1998, Gilat holds a minority share in Global Village Telecom (GVT), which specializes in the operation of satellite-based rural telephony networks, and in KSAT, a joint venture with Singapore-based Keppel Communications, which is dedicated to providing satellite-based telecommunication services in China. Skystar Advantage(TM) is a trademark of GE Capital Spacenet Services, Inc. ISAT(R), FaraWay(TM), DialAway(R), SkySurfer(TM), SkyBlaster(TM) and OneWay(TM) are trademarks of Gilat Satellite Networks Ltd. Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words "estimate", "project", "intend", "expect", "believe" and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to the Companys products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for the Companys products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the Companys proprietary technology and risks associated with the Companys international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with the Companys business, reference is made to the Companys reports filed from time to time with the Securities and Exchange Commission. Contacts: Robert Ferris/Steven Curtis Monica Morgan # # # |
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