CI Wireless Inc., a supplier of wireless signal distribution products for wireless carriers, last week acquired Ortel Corp.’s domestic wireless assets, including certain technology properties, products, leased facilities and the company’s wireless employee base.
Terms of the agreement were not disclosed, although Ortel said it was an all-cash transaction.
Dave McKay, president of CI Wireless, said the transaction provides a natural extension to its product line with little overlap. CI Wireless’ two main product lines are fiber-optic repeaters and low-power in-building repeater systems.
“More and more people are wanting single solutions from single providers,” said McKay.
McKay noted the repeater market-both for indoor and outdoor applications-has been slow up until now, but he said he expects that to change. Countries like Singapore and Hong Kong have deployed in-building products extensively, he said.
“The United States is going to be there,” he said. “It’s just a matter of when.”
In addition, as personal communications services carriers begin to build out smaller and rural markets that require less capacity, they likely will look for cost-effective solutions such as repeaters, said McKay.
In addition to the products it received through the transaction, CI Wireless has retained substantially all of Ortel’s wireless engineers, which McKay said is as big a benefit to CI Wireless as the products Ortel brings to its portfolio. McKay said CI Wireless has no plans to relocate Ortel’s wireless facilities and staff from California to Texas, where CI Wireless is based.
“Completion of the wireless transactions is one more critical element in refocusing Ortel on its core technologies in order to capture a more significant share of the considerable growth opportunities available to us in the telecommunications and cable industries,” said Stephen R. Rizzone, Ortel’s newly appointed chairman, president and chief executive officer. “Putting all of these elements behind us will enable Ortel to more rapidly build revenue growth and return to profitability.”
For Ortel’s fiscal year ended April 30, the company’s consolidated wireless operations recorded total revenues of $7 million with an operating loss of $3.3 million.
Ortel also said it is negotiating with a European buyer for the sale of its wireless operations in Sweden.
The wireless transactions, plus recent management changes and adoption of new accounting principles, are expected to result in special charges of about $9.3 million to be recorded in Ortel’s first fiscal quarter, which ended Aug. 1.
