Emblaze (LSE: BLZ) today announced the creation of Emblaze VCON Ltd., following the merger of Emblaze Systems, and video communication systems company VCON Telecommunications Ltd. (Nouveau Marche:VCON). The merged company will deliver next generation audio/video applications over IP and 3G wireless networks.
Following the acquisition, Emblaze will hold 70% of Emblaze VCON.
Emblaze Systems is a wholly-owned unit within the Emblaze group that provides delivery and management solutions for video over wireless IP networks.
VCON's product portfolio comprises a suite of management systems for enterprise IP solutions including switching and conferencing in both audio and video. The solutions maximize performance over IP networks and facilitate interactive communications between multiple remote users.
Under the terms of the deal, Emblaze Systems will acquire VCON's assets, technologies, products, intellectual property and channel partner relationships while continuing to enhance and leverage its existing business.
VCON stated that the merger followed its failure to raise funds. VCON's original investors will not receive any gain, but a new investor group (unconnected to VCON) has formed. The new investors are interested in owning up to 30% of Emblaze VCON. It is possible that at a later date, VCON's original investors will joint the new group.
In order to close its business, VCON will receive a cash injection in the amount of $1.6 million plus a $250,000 credit line from the unnamed private investors via Emblaze VCON.
Parent company Emblaze will assume certain liabilities relating to VCON's employees, but stated that the acquisition did not involve any cash, will not impact its cash position, revenue, and profit forecasts for the current year, and will not result in any dilution of Emblaze shareholder interests.
Emblaze VCON will operate from Europe, US and Israel, with a total 70 employees.
Emblaze Systems and VCON's combined client base includes Renault in France, WIND Telecommunications in Italy, Telstra in Australia, Optimus in Portugal, Orange Suisse, Orange Israel, Telekom Austria and others.
Emblaze CFO Guy Bernstein said, "This acquisition is another major step by Emblaze to leverage its world-class IP and wireless technologies for delivering rich content to address new fast growing markets. We are confident that the merged business, spearheaded by Emblaze, will create significant shareholder value."
Published by Globes [online], Israel business news - www.globes.co.il - on Wednesday, August 17, 2005