NEW YORK-Vulcan Ventures Inc., the investment organization chaired by Microsoft Corp. co-founder Paul G. Allen, announced Oct. 14 it would increase its stake in Metricom Inc., a wireless data and Internet access company, to 49 percent.
Vulcan, headquartered in Bellevue, Wash., has had a minority interest in Metricom since October 1993 when it paid $17.5 million to buy approximately 1.67 million shares in the Los Gatos, Calif., company, according to documents filed with the Securities and Exchange Commission.
Last week, Vulcan said it had entered into an agreement to buy 4.65 million shares from Metricom for $56 million and to take a leadership position on the company’s board of directors.
In a separate transaction, Vulcan also said it had agreed to buy 2.58 million Metricom shares from Lindner Investments, St. Louis. The purchase price for these shares is $15.5 million, according to SEC records.
Lindner Investments, a mutual fund that held more than 25 percent of Metricom’s stock at the end of last year, announced in late 1996 plans to seek a shareholder vote recommending the sale of Metricom in order to try to get a better value for stockholders.
Based on Vulcan’s pending stock purchase agreements, which are subject to shareholder and other approvals, Metricom said it would defer a pending bond offering of $125 million.
Metricom provides wide-area, high-speed portable wireless data services over unlicensed radio spectrum, and has served the utilities market for more than a decade.
Its Ricochet products and services division provides portable and desktop computer users with wireless access to the Internet, private intranets, local area networks, e-mail and online services. Ricochet currently is available in the greater San Francisco Bay area, Seattle, Washington, D.C., on several university campuses, to several large corporations and at several airports, Metricom said.
In January, Metricom said it anticipated the commercial launch of Ricochet in Los Angeles sometime this year. Lindner Investments’ criticism of the company related directly to the speed of Ricochet’s commercial deployment.
“We were impressed by the marketability and potential industry impact of the technology currently under development at Metricom,” said William Savoy, president of Vulcan.
“After careful review of the company, its plans and its products, we felt the new technology could be taken to market sooner and more effectively deployed nationally under our guidance and management.”
