Xircom Inc. announced it is acquiring Omnipoint Technologies Inc., a subsidiary of VoiceStream Wireless Corp. Xircom also said last week it will provide Bluetooth access products to Ericsson Mobile Communications AB and partner with Cisco Systems Inc. to provide wireless local area network products.
Under terms of its agreement with VoiceStream, VoiceStream will become a minority investor in Xircom, holding approximately 1.2 million shares of Xircom common stock to be exchanged for all outstanding shares of OTI. Based on Xircom’s closing price on June 12, the stock has a value of $52.2 million, Xircom said.
Xircom will assume certain liabilities and unvested employee stock options, valued at $8.3 million. The company also said its board of directors authorized the repurchase of up to 1.5 million shares of its common stock, contingent upon the closing if its acquisition of OTI.
The acquisition of OTI adds wide area network, Global System for Mobile communications and General Packet Radio Service products and technology to Xircom’s wireless data access solutions.
The transaction is expected to close within three weeks.
In its deal with Ericsson, Xircom said it will be the primary provider of mobile data access products for Ericsson, and will work on integrating Bluetooth technology into wireless data products such as personal digital assistants. Financial details of the transaction were not disclosed.
Finally, Xircom will partner with Cisco to develop, market and sell mobile wireless LAN network adapters based on the Institute of Electrical and Electronics Engineers 802.11b wireless ethernet standard.
Xircom and Cisco will develop Universal Serial Bus, Mini PCI and PC Card adapters to be used in notebooks and wireless handheld devices.
“These alliances with targeted wireless market leaders, along with the OTI acquisition, are key elements in Xircom’s strategy to enter into the wireless market and take advantage of the explosive growth predicted for the industry,” said Dirk Gates, Xircom’s chairman, president and chief executive officer.
