Netopia announced today they have entered into a definitive agreement in which Proxim will acquire Netopia in a stock-for-stock merger.
Under the terms of the merger agreement, each share of Netopia common stock will be converted into 0.3 shares of Proxim common stock, resulting in an aggregate purchase price of approximately US$223 million, based on the closing price of Proxim stock on Jan. 23. The acquisition will be accounted for as a purchase and is expected to be completed during late first quarter or early second quarter 2001. The closing of the acquisition is, naturally, subject to governmental approvals, Proxim and Netopia stockholder approval and customary closing conditions. This merger is expected to be accretive for the first full year of combined operation.
Alan Lefkof, CEO of Netopia, will become Proxim’s chief operating officer and co-chairman of the board. David King, CEO of Proxim, will remain Proxim’s chief executive officer and become co-chairman of the board. Netopia’s other key management will take on additional responsibilities as part of the management team in the combined company.
Proxim provides wirefree networking solutions to homes, enterprises and service providers. The company’s consumer business unit — better known to Mac users as Farallon —
debuted a $399 network gateway that combines a traditional wired Ethernet-based Internet router and an AirPort-compatible, 802.11b wireless networking base station at the recent Macworld Expo in San Francisco. Proxim also announced that it is shipping the Farallon SkyLINE PCI Card, which allows older desktop Macs to connect wirelessly to AirPort Base Stations and other 802.11b wireless networking products
Netopia provides broadband Internet equipment and e-commerce Web platforms to carriers and service providers that incorporate all major loop technologies. For instance, in October, the company
introduced an inexpensive 10-Base-T-Ethernet four-port router with easy-to-configure firewall and virtual private networking security.