Xircom buys Franklin's Rex product line
Franklin shares sink; Xircom expects quarter charge
URL: cbs.marketwatch.com
By Myra P. Saefong, CBS MarketWatch
Last Update: 9:22 PM ET Sep 28, 1999 Also: NewsWatch
BURLINGTON, N.J. (CBS.MW) -- Shares of Franklin Electronic Publishers dropped Tuesday after Xircom agreed to buy its Rex product line for more than $13 million in an attempt to expand Xircom's mobile-access offerings.
Shares of Franklin Electronic (FEP: news, msgs) sank 1 1/4, or 21 percent, to 4 11/16, while Xircom's stock (XIRC: news, msgs) rose 1/16 to 42 3/8.
Late Monday, Thousand Oaks, Calif.-based Xircom announced it will pay $13.25 million for selected assets of Franklin's Rex product line, a "wearable information accessory," according to Dirk Gates, chairman and chief executive of Xircom. See press release.
Xircom also said it expects to see a $3 million-to-$4 million charge in the fourth quarter related to the write-off of purchased research-and-development services. The market's fourth-quarter consensus estimate, according to First Call, calls for a profit of 50 cents per share.
Meanwhile, Franklin Electronic Publishers, a leader in handheld electronic books, predicted an $8 million gain as a direct result of the deal, although it didn't state when the gain would be recorded. See press release.
Xircom, which designs and develops devices that connect portable PCs to corporate networks, plans to build industry partnerships to enhance the Rex product line's functionality. Part of the plan will be to launch an enterprise version of Xircom Rex that combines information-management capabilities with RSA Security's (RSAS: news, msgs) SecurID technology to offer better security for network users.
Myra P. Saefong is a reporter for CBS MarketWatch.
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