ACCEL AND KKR FORM NEW TELECOM VENTURE; NAME
ARUN SARIN AS CHIEF EXECUTIVE OFFICER
Veteran Executive To Lead Initiative Focused
On Telecommunications Industry Buyouts as well
as Strategic Minority Investments
MENLO PARK, CA, July 18, 2001
- Accel Partners and Kohlberg Kravis Roberts
& Co. (KKR) announced today they have formed
an additional venture to focus on telecommunications
industry investments and have named Arun Sarin,
former president of AirTouch and chief executive
officer of InfoSpace, as chief executive officer.
The new venture, called Accel-KKR Telecom,
will invest in and manage assets in the telecommunications
business on a global basis using the joint human
and financial resources of the two firms. Funding
for specific investments will come from KKR's
existing Funds, Accel's latest Funds, and from
the Fund managed by the existing Accel-KKR partnership.
Accel and KKR currently work together in applying
online technology to major corporations through
a venture established in 2000.
The new venture will focus both on companies
that have exciting growth prospects as well
as on large enterprises that are looking to
recapitalize their balance sheets as they fine-tune
their business models in response to market
challenges. Given Accel and KKR's expertise
in a range of private equity finance, the new
venture is interested in traditional buyouts
as well as strategic minority investing where
it has an opportunity for substantial governance
participation.
Mr. Sarin, 46, is a 17-year veteran of the
telecom industry, and has managed both large
and small businesses in the wireless, wireline,
Internet, and international arenas. He will
also join the Board of the telecom venture,
along with Henry R. Kravis and George R. Roberts,
who are both founding partners of KKR; James
W. Breyer, managing partner of Accel; and Paul
Hazen, chairman of the existing Accel-KKR partnership,
deputy chairman of Vodafone, and retired chairman
and chief executive officer of Wells Fargo Bank.
"We are delighted to have someone of Arun
Sarin's caliber join forces with KKR and Accel
as we bring together significant financial resources,
technology expertise, and management know-how
to address a dynamic market opportunity,"
said Mr. Kravis. "While KKR has invested
selectively and prudently in the telecommunications
industry since 1995, and Accel since 1983, we
believe the opportunities today are very attractive
as the industry remakes itself in fundamental
ways."
Jim Breyer of Accel said, "Telecommunications
will be one of the single most important and
dynamic industries of the 21st century. The
gap between the size of the opportunity and
the difficulties many industry players are currently
experiencing is why we believe telecom represents
such a significant opportunity."
"Given the scope of this opportunity,
we wanted to form a venture with the leadership
to navigate a rapidly changing landscape and
the management experience to help sort through
the operational and structural challenges many
telecom companies face today," said KKR's
Mr. Roberts. "When Paul Hazen introduced
Henry, Jim Breyer, and myself to Arun, we knew
that with his help we could create a strong
vehicle to capitalize on the valuation and restructuring
opportunities the telecom industry presents
to private equity investors."
"This is a terrific time to think about
telecommunications products and services and
look for ways to put new ideas to work, "
said Mr. Sarin. "I had been looking for
an opportunity that would combine depth of financial
resources and smart, seasoned investors with
a long-term commitment to the industry. I am
happy to be working with Accel-KKR Telecom and
the teams of professionals that stand behind
both organizations as we create an exciting
new venture designed to build value for Accel
and KKR investors."
Mr. Sarin began his telecommunications career
at Pacific Telesis, a predecessor to AirTouch
Communications, in 1984, working on cellular
business acquisitions. In 1989, he became vice
president of strategy and subsequently ran the
San Francisco Bay area wireline business of
Pacific Bell. He then spent three years as president
and chief executive officer of AirTouch's international
business. In 1997, Mr. Sarin was named president
and chief operating officer of AirTouch Communications,
one of the world's largest cellular communications
companies. At the time of its acquisition by
Vodafone, he became chief executive officer
of the U.S. and Asian businesses, leading the
combined companies' technology and Internet
efforts on a global basis. In April 2000 he
was named chief executive officer of InfoSpace,
an Internet infrastructure company.
Mr. Sarin has an MS in Engineering and an MBA
from the University of California at Berkeley.
He received his BS in Engineering from IIT,
the Indian Institute of Technology. He is on
the Boards of Directors of Cisco, Vodafone plc,
Gap Inc., and Charles Schwab Corp. as well several
non-profit and educational Boards. He lives
in Piedmont, Ca. with his wife and two children.
About Accel Partners
Accel Partners (www.accel.com)
has a history of excellence and innovation in
the venture capital business. The firm is dedicated
to partnering with outstanding management teams
to build world-class software/Internet and communications
companies. With over $3 billion under management,
Accel Partners has a legacy of helping entrepreneurs
build highly successful companies. Since its
founding in 1983, Accel has invested in over
100 communications companies, including Avici
Systems, Foundry Networks, RealNetworks, RedBack
Networks, UUNET, and many others.
About KKR
KKR (www.kkr.com)
is an investment firm that makes a wide variety
of private equity investments on behalf of itself
and its investors. These investors include state
and corporate pension funds, banks, insurance
companies and university endowments. Since its
founding in 1976, KKR has completed more than
100 transactions involving over $100 billion
of total financing. KKR has made nine investments
in the telecommunications industry, starting
with its 1995 purchase of Reliance Comm/Tec,
a manufacturer of power, connection and other
"last mile" telecommunications equipment,
which it renamed RelTec, from Rockwell International
for $500 million. RelTec was sold to General
Electric plc in 1999 for $2.1 billion. Other
transactions include buyouts of Amphenol (NYSE:
APH), a world-leading manufacturer of interconnect
products, and Tenovis, the leading provider
of PBX communications systems to business customers
in Germany.
# # #
CONTACT:
For KKR
Ruth Pachman/Molly Morse
Kekst and Company
(212) 521-4800
ruth-pachman@kekst.com
molly-morse@kekst.com
For Accel Partners
Jim Breyer
Managing Partner
(650) 614-4800
jbreyer@accel.com
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