Vyyo Inc. (VYYO) has entered into an agreement to acquire substantially all of the shares of Xtend Networks Ltd. (Xtend).
Xtend, headquartered in Tel-Aviv, Israel with operations in Atlanta, Georgia, provides cost-effective broadband solutions that increase the bandwidth of existing last-mile cable TV networks.
The transaction calls for the issuance of approximately 1,401,857 shares of Vyyo common stock and an additional 146,000 shares of restricted common stock in Vyyo, 75,000 of which are subject to performance.
The transaction further provides for cash payments, not to exceed approximately $10.7 million, a substantial portion of which is subject to performance criteria open until the end of 2006. The total consideration is contemplated not to exceed approximately $19.6 million.
Xtend has cash on hand of approximately $3.5 million which Vyyo believes will be sufficient to fund its business operations for the rest of 2004.
November 2003, Xtend announced that it was approved as a vendor by a large US multiple systems operator (MSO) following extensive field tests. Subsequently, Xtend entered into a master purchase agreement with the MSO to address the needs of commercial customers over hybrid fiber coaxial (HFC) networks.
Vyyo chairman and CEO Davidi Gilo said, "Our purchase of Xtend expands our cable strategy that we launched using our unique DOCSIS-based platform. We believe that Xtend's technology solves bandwidth constraint problems and allows for the timely introduction by MSOs of services, such as video telephony, that require a substantial increase in available bandwidth. These features enable cable operators to be more competitive with telecom operators and can potentially reduce subscriber churn due to satellite TV competition, thus increasing cable TV revenues."
"We are very pleased to welcome Dr. Hillel Weinstein and his entire team to Vyyo," continued Gilo. "Dr. Weinstein is a prolific inventor and experienced executive in the high-tech industry. He is also the inventor of U.S. Patent No. 3,481,199, the first granted for multiplexing data over operating TV channels. We believe that both companies share a similar innovative culture and we look forward to operating together."
In a separate release today, Vyyo announced its new cable strategy of offering cable companies DOCSIS-based T1 circuit-switched capabilities and its field test of the offering by a large U.S. cable operator.