Satellite broadcast equipment developer Wegener Corporation is to be acquired by an unnamed public company.
The Wegener board of directors announced that it has unanimously approved a term sheet for the acquisition, which is expected to be completed in…
Satellite broadcast equipment developer Wegener Corporation is to be acquired by an unnamed public company.
The Wegener board of directors announced that it has unanimously approved a term sheet for the acquisition, which is expected to be completed in the first quarter of 2014.
Commenting on the proposed transaction, Troy Woodbury, president and CEO of Wegener, said: “I am very pleased and enthused by the improvements this acquisition provides for Wegener Corporation and its shareholders. This acquisition will provide long term financial stability for Wegener and is providing a near term source of working capital. There are real synergies with the company acquiring Wegener and with another company currently under negotiations to be added to the group.”
If successful, the deal would bring an end to Wegener’s recurrent financial struggles of the past few years. As with many of its peers, Wegener had suffered from a substantial fall in both its revenues and backlog during the global economic downturn.
The company teetered on the brink of bankruptcy in 2009 when a planned US$6m acquisition by white knight Sencore fell through and left Wegener holding last ditch negotiations with its lending bank, Bank of America, over the restructuring of its debt.
A year later Wegener delisted from the Nasdaq stock exchange after it had failed to maintain a minimum bid price of a US$1 per share and in November 2012 the company announced that it was to terminate its registration as a public company.
Despite the ongoing economic recovery, the company’s fortunes have continued to flounder. In it most recent financial statements, Wegener revealed that revenues had fallen 31% year-on-year for the nine months ended 31 May 2013. The company did, though, reduce its net losses by US$836,000 in the same period predominantly through cost cutting and a lower cost in the products it sold.
“We are in the process of coming through a very difficult financial period for Wegener and we are encouraged by the opportunities in the future. This acquisition of Wegener should give renewed confidence to our customers, shareholders, employees, and our creditors,” Woodbury added.
Wegener specialises in providing digital video and audio solutions, particularly in optimizing point-to-multipoint multimedia distribution over satellite.
