CSI Wireless Divests Fixed Wireless Business
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)
- $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.
The transaction is subject to certain conditions and the two parties expect to close the transaction on May 1, 2006.
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.
GMP Securities L.P. acted as adviser on this transaction for CSI Wireless.
About Telular CorporationTelular Corporation is a leader in the design and manufacturing of wireless products. Telular's proprietary telecommunications interface technology enables standard phones, fax machines, computer modems or monitored alarm systems to utilize available cellular wireless service for either primary or back-up telecommunications. Their product lines incorporate the world's leading cellular standards (CDMA, GSM, TDMA, AMPS) and are marketed worldwide. Headquartered in Vernon Hills, Illinois, Telular has regional sales offices in Atlanta, Delhi, Dubai, Johannesburg, London, Mexico City, Miami and Singapore. Telular is publicly traded on the NASDAQ under the trading symbol "WRLS". For further company information, visit Telular at http://www.telular.com.
About CSI WirelessCSI Wireless designs and manufactures innovative, cost-effective, wireless and GPS products for applications in agriculture, marine and other markets. CSI is a leader in several high-growth markets. The Company owns leading brand names, numerous patents, and other intellectual property. It has licensed its technology to manufacturers of chipsets and GPS receivers. The Company's head office is in Calgary, Alberta, and it has major product development, sales and marketing facilities in Arizona, Kansas and Texas. For more information about CSI, go to www.csi-wireless.com.
Source: CSI Wireless, April 24, 2006.