3Com buys EuPhonics

Networking giant 3Com will announce on Friday the acquisition of EuPhonics, a maker of audio software for audio chips and networking cards, for $8.3 million.

The move is intended to accelerate the inclusion of multimedia technologies within networking cards and modems, the hardware that allows PCs to connect to networks and the Net. 3Com said the company would pay for the transaction using cash.

3com will also assume responsibility for EuPhonics' stock option plan.

3Com executives said the technology will allow the firm to create a new breed of networking cards and modems that will include a sound card on the same board as connection-oriented hardware and software. Currently, PCs include a separate card for handling audio transmissions.

"It just makes a lot of sense to bring these two technologies together, said Bob Suffern, vice president of business development for 3Com's personal communications division. "In the long run what we'll be doing is audio-enhancing all of our communications products."

Products resulting from the acquisition will roll out in the second quarter of next year, according to the company.

The deal will be accounted for as a purchase. Charges related to the acquisition will be reflected in 3Com's fiscal 1999 second quarter. The charges are not expected to impact the company's fiscal 1999 results, according to 3Com.

Suffern said they plan to release a full line of audio-enabled products for PCs using EuPhonics technology. The executive also said the company will take advantage of opportunities to leverage the technology as the broadband networking market develops, likely resulting in audio-enabled cable and digital subscriber line (DSL) modems.