Yakum-based Metalink Ltd. (Nasdaq: MTLK;TASE: MTLK) will sell its WLAN (wireless local area network) business - its primary operations - to fabless semiconductor company Lantiq for up to $16.9 million.
Munich-based Lantiq is a new company, a spin-off of Infineon AG (NYSE; XETRA: IFN), and funded by Golden Gate Capital, which paid $243 million for the business. The acquisition of the WLAN business from Metalink is Lantiq's second acquisition, following the acquisition of home networking and DSL assets from Aware Inc.
Lantiq will pay $5.7 million upon closing, up to $1.2 million (subject to downward adjustments)to be paid on March 31, and $2 million to be paid in four installments throughout the year 2010. In addition, Lantiq will pay earn-out payments of up to an aggregate $8 million, depending on the business meeting sepcific milestones through March 12.
Metalink is a fabless semiconductor company which develops chipsets for WLANs and broadband and DSL access. CEO Tzvika Shukhman does not intend to turn the company into a stock market shell, but to use proceeds from the deal to seek new opportunities that are synergetic to its remaining business.
In March, Metalink was due to repay a $4.3 million debt, while the company only has $3.8 million in cash. The company said that it reached a deal to reduce the debt to $4.1 million, which would be paid in four installments. The first installment of $3.75 million will be paid with proceeds from the Lantiq deal, when it is closed.
Metalink CFO Yuval Ruhama is expected to step down when the deal closes, but will continue working as a consultant to Metalink through the end of 2010.
Shares in Metalink closed at $0.2911 yesterday, giving a market cap of $7.49 million.
Published by Globes [online], Israel business news - www.globes-online.com - on January 6, 2010
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