“Globes” has learned that ViryaNet (Nasdaq: VRYA), a provider of wireless field service solutions, will buy US-based iMedeon for $2.5 - $3 million in a share-swap deal.
iMedeon operates in a similar field to ViryaNet. The reasoning behind the acquisition is that both companies can generate costs savings by combining their activities.
ViryaNet shares closed on Monday at $0.55 on Nasdaq, reflecting a $12 million market cap. This means that ViryaNet will have to issue 4.5 - 5.5 million shares for the acquisition. iMedeon shareholders will then own about 20% of the combined company.
Twelve days ago, ViryaNet reported its first ever pro-forma net profit, which came after the company laid off over a third of its workforce at the end of 2001. The company also announced that it expected revenue growth and profitability in 2002.
ViryaNet’s net profit - excluding one-time charges - was $400,000 (or $0.02 per share) in the fourth quarter of 2001. Revenue in the fourth quarter was $5.0 million, and was 4% lower than in the previous quarter, when revenue was $5.2 million. For year 2001, revenue was $20 million, and net loss was $14.6 million.
Published by Israel's Business Arena on 26 February, 2002