UTStarcom Sells Handset Business for US$240
July 1, 2008 6:30 PM | UTStarcom | Comments (0)
UTStarcom, Inc., today announced that it has reached an agreement to sell its Personal Communications Division ("PCD") for approximately US$240 to a newly formed entity controlled by AIG Vantage Capital, a part of AIG Investments. In addition to the cash consideration, UTStarcom could also receive up to US$50 million based on a three-year earn out provision. The transaction, which is expected to be completed within two business days, has been unanimously approved by UTStarcom's board of directors and is subject to customary closing conditions including debt financing. Completion of the transaction is not subject to UTStarcom shareholder approval and the waiting period under the Hart-Scott-Rodino Antitrust Improvement Act has expired. The divestiture of PCD is consistent with UTStarcom's strategic focus announced in late 2007, which is aimed at maximizing UTStarcom's opportunities in its core IP-based product offerings in rapidly growing economies around the world. |  |
The PCD business, which primarily distributes handsets and related accessories in North America, was identified as a divestiture opportunity at that time. This transaction, combined with the recently announced divestiture of the Mobile Solutions Business Unit, will complete two milestones in simplifying the operations of UTStarcom.
Subsequent to the transaction, the privately held company will be called Personal Communications Devices, LLC and will be led by PCD's current management team who will be part-owners of the company with AIG Vantage Capital and other investors. The Handset business unit of UTStarcom will continue to design and provide devices to be sold in the Americas through Personal Communications Devices, LLC as part of a supply agreement. UTStarcom will also sell devices directly to carriers in other areas of the world.networks. UTStarcom was founded in 1991 and is headquartered in Alameda, Calif. The company has research and development centers in the USA, Canada, China, Korea and India.
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