Wireless networking provider Proxim Inc. announced Tuesday it plans to acquire broadband Internet equipment vendor Netopia Inc. in a stock-for-stock merger valued at US$223 million. Proxim hopes the acquisition will help it more swiftly expand the deployment of broadband services using wireless, cable and DSL (digital subscriber line) technologies.
While Proxim’s products are aimed at consumers, corporations and service providers, customers for Netopia’s equipment are primarily carriers and service providers.
The two companies have agreed on terms for the purchase, which will see each share of Netopia common stock being converted into 0.3 shares of Proxim common stock, according to a Proxim statement. The value of the deal is $223 million based on Proxim’s closing stock price on Tuesday.
Proxim hopes to complete the purchase either late in the first quarter of 2001 or early in the second quarter, subject to regulatory and shareholder approval.
Acquiring Netopia will give Proxim access to loop technologies such as DSL as well as its customer base of service providers, Proxim said in the statement.
Netopia Chief Executive Officer Alan Lefkof will become Proxim’s chief operating officer and co-chairman of the board. The other board co-chairman will be David King, who will also continue his role as Proxim chief executive officer.
Following Tuesday’s news, Proxim (PROX) shares ended Wednesday’s trading down 17.63 percent to $30.38, while Netopia’s (NTPA) stock closed up 9.92 percent at $9.00.
Proxim, based in Sunnyvale, California, can be reached at +1-408-731-2700 or via the Internet at http://www.proxim.com/. Netopia, based in Alameda, California, can be reached at +1-510-814-5100 or via the Internet at http://www.netopia.com/.