Wifi Revolution

Mergers and acquisitions are so commonplace in the telecommunications industry that it hardly seems like news when it happens. However, it is important to the clients that it will impact and the stockholders who have a vested interest. If the newly combined company can be stronger and deliver better services than its predecessors, then how can the acquisition be a bad thing?

Wi-LAN and Tri-Vision are hoping that the combing of their two companies will fall on the positive side. The two companies signed a definitive acquisition agreement whereby Wi-LAN will acquire Tri-Vision, consistent with the letter of intent that was announced on March 27, 2007.

Once the merger is complete, a new Canadian pure play intellectual property giant is expected to emerge. Beyond Wi-LAN’s already strong intellectual property portfolio in the wireless and telecom worlds, the combined company will have access to the high-growth V-chip market, the only current solution to parental controls mandated by the U.S. Federal Communications Commission.

“I believe this is a great fit for Wi-LAN and further accelerates our growth strategy,” said Jim Skippen, Wi-LAN president and CEO, in a statement. “Given the significant synergies with our potential licensees, it is a definite win-win for both companies.

Skippen went on to add that, “many of the major companies who require a V-chip license are also targets for Wi-LAN’s existing portfolio. In addition to providing strong future cash flows from existing licensees, it will expand our war chest to approximately $100 million to pursue other acquisition opportunities and to handle multiple litigations.”

“We believe this is an outstanding transaction for our shareholders,” added Tim Collings, Chairman of Tri-Vision and inventor of the V-chip, in Friday’s statement. “We have always been confident in the strength of our V-chip technology.”

“We are particularly excited about the opportunities this partnership represents to benefit from Wi-LAN’s licensing experience and litigation resources to help us enforce our patent rights, especially in the huge U.S. market. We look forward to working with their team to ensure a rapid and seamless transition,” Collings added.

The transaction has been unanimously approved by the board of directors of both companies. Acumen Capital Finance Partners Limited has provided the Tri-Vision board with a formal written opinion stating that the transaction is fair. Tri-Vision’s board of directors is recommending that Tri-Vision shareholders vote in favor of the transaction.

Under the terms of the transaction agreement, each Tri-Vision common share will be exchanged for a fraction of a Wi-LAN common share, determined by dividing $1.72 by the volume weighted average trading price of the Wi-LAN common shared on the TSX for 10 randomly selected days within the 20 trading days preceding closing of the transaction. Tri-Vision will become a wholly-owned subsidiary of Wi-LAN.

One condition of the completion of the transaction is that Tri-Vision will have acquired the V-chip patents, certain rights of which are currently licensed to Tri-Vision, from a company controlled by Tri-Vision Chairman, Tim Collings. Subject to regulatory approval and completion of the Wi-LAN merger transaction, Tri-Vision has agreed to issue 1,077,693 common shares in consideration for the transfer of these patents.

The completion of the transaction is subject the approval by at least two-thirds of the votes cast at a meeting of Tri-Vision shareholders as well as a majority of the votes cast at such meeting by disinterested shareholders. It is expected that the transaction will be completed by late June 2007.

--------

Susan J. Campbell is a contributing editor for TMC (News - Alert) and has also written for eastbiz.com. To see more of her articles, please visit Susan J. Campbell’s columnist page.

Don't forget to check out TMCnet’s White Paper Library, which provides a selection of in-depth information on relevant topics affecting the IP Communications industry. The library offers white papers, case studies and other documents which are free to registered users.

Also be sure to attend TMC’s Communications Developer Conference to be held May 14-17, 2007 at the Hyatt Regency Santa Clara, Calif. Come learn how to build the next generation of IP-based communications products and services!

Back to WiFi Revolution home