Monday, June 13, 2005

Proxim Files for Chapter 11, Sells Assets

Proxim, a supplier of Wi-Fi and broadband wireless equipment, announced a Chapter 11 bankruptcy filing and agreed to sell its assets to Moseley Associates, which also supplies wireless systems.

Under the agreement, 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. 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.

The contemplated acquisition by Moseley would be expected to preserve most of Proxim's operations. Moseley and Proxim believe there are significant synergies and advantages to the combination of their businesses. Proxim's focus on Wi-Fi, WiMAX and broadband wireless access for enterprises and service providers has resulted in solutions for the mobile enterprise, last mile access, metropolitan area networks, public safety, and voice and data backhaul. Combining Proxim's offerings with Moseley's diversified global product lines will enable Moseley to offer an expanded and differentiated portfolio of wireless products covering spectrum from 200 MHz to 38 GHz.

  • Earlier this month, Proxim received a Nasdaq delisting notification. For Q1, Proxim reported revenue of $25.4 million and a net loss (GAAP) of $(7.8) million, or $(0.24) per common share. This compares with a GAAP net loss of $( 67.7) million, or $(2.69) per common share, in the preceding fourth quarter of 2004 and with a GAAP net loss of $(17.5) million, or $(1.42) per common share, in the first quarter of 2004.

  • In 2002, Proxim acquired the WLAN equipment business of Agere Systems for $65 million in cash. The purchase included the ORiNOCO lines of equipment for homes, small offices, enterprises, service providers and outdoor environments.

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