Product category: Wireless Communications
News Release from: Hemisphere GPS
Edited by the Electronicstalk Editorial Team on 25 April 2006
Fixed wireless sale leaves CSI to focus
on GPS
CSI Wireless is to sell its fixed wireless telephone business to Telular Corporation.
CSI Wireless has signed a definitive agreement to sell its fixed wireless telephone (FWT) business to Telular Corporation of Vernon Hills, Illinois Telular has agreed to acquire CSI's FWT business assets for the following consideration: $3.9 (US $3.4) million cash on closing; $6.8 (US $6.0) million escrowed (6 months) Telular shares on closing (1,931,745 shares); and $4.1 (US $3.6) million in contingent Telular shares (1,159,047 shares), for total potential proceeds of $14.8 (US $13.0) million
This article was originally published on Electronicstalk on 12 Feb 2002 at 8.00am (UK)
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The number of contingency shares payable to CSI Wireless will be based on the revenues earned by Telular on GSM and TDMA fixed wireless telephone sales in specific markets during defined periods which will end no later than 30th June 2007.
The number of contingency shares has been fixed based on the average closing share price for the 25 days prior to signing of this agreement.
The transaction is subject to certain conditions and the two parties expect to close the transaction on 1st May 2006.
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The decision to find a buyer for the fixed wireless business follows a recent decision by CSI to also sell its telematics business.
CSI has elected to focus all of its resources on its GPS products where it is a market leader and has strong competitive advantages.
CSI's Hemisphere GPS division, which owns the Outback, Satloc and Del Norte brand names, is the market leader in GPS guidance products for the precision agriculture market in both the ground (tractors/sprayers) and air (cropdusters) verticals.
"CSI has historically participated in both the Wireless and GPS markets, which have fundamentally different business models", explained Stephen Verhoeff, President and CEO of CSI Wireless.
"This has created a number of challenges for the company both internally, and externally".
"After much deliberation, we determined that the GPS and fixed wireless businesses would perform better, and be more appropriately valued, if separated".
"We reviewed a number of alternatives, and determined that divesting our Fixed Wireless business to Telular was the best option".
"We are confident about Telular's plans for the fixed wireless markets and both companies agreed that the businesses would benefit from consolidation".
"Moving forward, CSI will be a 'pure-play' GPS company, focused on becoming the preeminent supplier of GPS products to all the markets we serve".
Historically, the GPS business has been the strongest performer for CSI, and therefore as a result of these actions, overall corporate performance is expected to improve.
CSI is focusing specifically on opportunities driven by its core competencies and those with the greatest earnings potential.
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