Looking to strengthen its position in the wireless market, Xircom has announced that it plans to acquire Omnipoint Technologies (OTI) for approximately $US52 million in stock.
Xircom, which makes network access devices including computer modems, said the acquisition will enhance its wireless offerings by adding wide area network (WAN), global system for mobile communications (GSMs) and general packet radio services (GPRS) products and technologies to its portfolio.
OTI is a wholly owned subsidiary of VoiceStream Wireless. The deal has been approved by the boards of directors of VoiceStream and Xircom and is expected to close within three weeks subject to the approval of federal regulators, Xircom said.
Under the terms of the agreement, VoiceStream will become a minority investor in Xircom by holding 1.2 million shares of Xircom common stock, which will be exchanged for all outstanding shares of OTI.
In addition, Xircom will assume certain liabilities, and unvested employee stock options with a value of approximately $8.3 million as of June 9, 2000, Xircom said.
The acquisition will be accounted for as a purchase, and Xircom expects to incur a related charge to earnings of between $15 million and $25 million during the financial quarter due to close June 30.