SANTA BARBARA, Calif.—724 Solutions Inc. announced it will go ahead with its plan to be acquired by venture-capital firm Austin Ventures. Austin said it would acquire 724 for $3.34 per common share. The amount is slightly more than the previous purchase price the companies agree on in March, which valued 724 at $3.04 per share.
Austin Ventures and its affiliates already own about 38 percent of 724 Solutions’ common stock.
724 Solutions develops wireless Internet Protocol-based network and data services technology. The company has development offices in Canada and Switzerland while its corporate headquarters are in Santa Barbara, Calif.
Signs of troubles at 724 Solutions surfaced in October when Hewlett-Packard Co. dropped the company as a subcontractor for its access gateway solution deployment with Sprint Nextel Corp. At the time, 724 Solutions said the change could reduce its revenue from HP by $500,000 per month, but the company also said it would continue in talks with Sprint Nextel for alternate uses for its technology within the carrier’s CDMA network.
Last year, 724 reported a net loss of $6.1 million from revenues of $18.3 million, compared with losses of $8 million from revenues of $15.1 million in 2004.
