Proxim Sells Assets for $21M
The deal ends months of speculation surrounding the fate of Proxim. In April Unstrung laid out the extent of the company’s problems and last month touted a potential buyout by Moseley (see Proxim Has a Debt Dilemma , Proxim on the Ropes, and Proxim Faces D-Day).
“Moseley will acquire and assume most of the domestic and foreign operations of Proxim for a purchase price of $21 million, subject to certain adjustments and deductions,” notes a joint statement (see Moseley Acquires Proxim). “The sale will be implemented through Proxim’s filing of a Chapter 11 bankruptcy case in the United States Bankruptcy Court for the District of Delaware and subject to court confirmation and overbidding procedures.
“In connection with the sale, Moseley also has agreed to provide Proxim with bridge financing in the principal amount of up to $6.2 million, to be offset against the purchase price. Under the terms of the transaction as contemplated, no proceeds of the sale are expected to be distributed to Proxim stockholders.”
Formerly a top-three player in enterprise wireless LAN equipment sales, Proxim has struggled to keep pace with rivals Cisco Systems Inc. (Nasdaq: CSCO) and Symbol Technologies Inc. (NYSE: SBL) in this fast-moving market over the last couple of years. For the first quarter ended April 1, Proxim posted a net loss of $7.8 million, or $0.24 per share, on revenues of $25.4 million, compared to a net loss of $17.5 million, or $0.42 per share, on revenues of $26.7 million in the same period a year ago (see Proxim Reports $7.8M Q1 Loss).
Moseley is expected to continue developing Proxim’s wireless LAN, broadband wireless, and WiMax products. “We intend to fully support all of Proxim’s existing customers and product warranties,” comments Jamal Hamdani, president and CEO of Moseley, in a statement. “Our plan includes providing an invigorating and exciting work environment for Proxim’s employees as well.”
Neither company was available for comment at press time.
The firm’s shares, which were worth over $250 at their high point in 2000, languished at $0.32 at the close of trading on Friday.
— Justin Springham, Senior Editor, Europe, Unstrung