Posted on 18-Jun-2004 21:45
Filed under: News
Audiovox Corporation has announced that its majority owned subsidiary Audiovox Communications Corporation has entered into a definitive agreement to sell selected assets and liabilities (excluding its receivables, inter-company accounts payable, and certain accrued expenses), to UTStarcom, Inc. for a total purchase price of $165.1 million in cash, subject to certain post closing adjustments.
Audiovox has agreed to enter into a five-year royalty free licensing agreement permitting UTStarcom to use the Audiovox brand on certain products. Audiovox recently purchased 5% of ACC's shares from Toshiba Corporation, ACC's minority stockholder, and has entered into an agreement with Toshiba to purchase the balance of Toshiba's shares prior to the closing. Toshiba will be paid $15 million, which includes the repayment of an $8.1 million subordinated note. Audiovox Communications Corporation anticipates that the net proceeds of the sale will be approximately $90 million, subject to certain adjustments.
While the company anticipates the transaction to close during the second half of 2004, there can be no assurances as it is subject to certain closing conditions, including regulatory, third party and Audiovox shareholder approval. The Company's Board of Directors as well as the Board of UTStarcom has approved the transaction and John Shalam, Audiovox's Chairman and Chief Executive Officer and majority shareholder, has agreed to vote his Audiovox shares in favor of this deal.