P-Com agreed to acquire the operating assets of SPEEDCOM Wireless Corporation in exchange for approximately 67 million shares of P-Com common stock and the assumption of $3 million in debt. Both companies are suppliers of fixed wireless broadband equipment. SPEEDCOM Wireless, which is based in Sarasota, Florida, offers a line of wireless Ethernet routers with 128-bit AES encryption, mesh and star functionality. The SPEEDCOM equipment supports rates from 11 Mbps up to 155 Mbps over distances of 25 miles or more. P-Com, which is based in Campbell, California, supplies spread spectrum, point-to-point wireless access systems. Prior to completion of the transaction, P-Com is also undertaking a recapitalization that includes the following:
- the conversion of approximately $20 million in principal amount of P-Com's 7% Convertible Subordinated Notes due 2007 into shares of P-Com Common Stock;
the elimination of certain accrued liabilities and long-term debt totaling in excess of $10 million;
the completion of an equity financing transaction in which P-Com receives gross proceeds of approximately $5 million to $7 million
P-Com said it believes that it is beginning to see initial signs of stabilization in the marketplace and that the synergies of this acquisition will allow it to continue to reduce its cost structure and begin to generate sequential sales growth.
http://www.speedcomwireless.com
