Here's the news we were waiting for with/WSTL. Explains the upward move over the last month or so.
biz.yahoo.com
Monday December 13, 7:20 pm Eastern Time
FOCUS-Westell to buy Teltrend for $205 mln in stock
(Adds conference call, Teltrend interview, details, adds byline, pvs AURORA)
By Yukari Iwatani
CHICAGO, Dec 13 (Reuters) - Telecommunications equipment makers Westell Technologies Inc. (NasdaqNM:WSTL - news) and Teltrend Inc. (NasdaqNM:TLTN - news) said Monday that Westell has agreed to acquire Teltrend for about $205 million in a bid to bolster Westell's high-speed communications offerings.
Under terms of the stock deal, Teltrend shareholders will receive 3.3 shares of Westell stock for each Teltrend share. Based on Monday's closing price of 12-3/16 for Westell, the deal values Teltrend shares at about $40.84 a share, a 69 percent premium over Teltrend's Monday closing price of 24-1/8.
Aurora, Ill.-based Westell said it will take a one-time charge for merger and related expenses upon the closing of the deal which is expected to occur in the fourth quarter of Westell's fiscal year 2000, which ends in March. The combined company expects to be profitable in its fiscal first quarter ending in June 2000.
St. Charles, Ill.-based Teltrend designs, manufactures and markets a broad range of telecommunications and data communications products used by telephone service companies to provide voice and data services.
By merging Teltrend with a unit of Westell, the combined company will strengthen its high-speed DSL (digital subscriber line) technology products.
``We very much did this for DSL. We really strengthened the part of our business that we weren't growing yet in the way we wanted it to,' Marc Zionts, chief executive of Westell, said in a conference call with analysts, investors, and employees.
Teltrend's senior vice president of finance, Douglas Hoffmeyer, told Reuters that the combination is complimentary to the DSL products business because Teltrend focuses on HDSL products, which serves business end-users, while Westell, focuses on ADSL products, which serves residential end-users.
Westell said it expected the deal to cut operating expenses, increase operating leverage and strengthen its sales channel.
Zionts said in the conference call that Westell expects to initially reduce the combined workforce as a result of the acquisition to eliminate overlap. ``About 1 in 9 parties will be impacted initially,' he said.
Westell and Teltrend have a total of about 800 employees in Illinois as well as others outside of the state.
Westell also had announced Monday that it appointed Zionts, who was previously chief executive of Westell Inc., the products subsidiary of Westell Technologies, as chief executive of Westell. The company also said Robert Gaynor, the previous chief executive, would remain as chairman.
Westell told Reuters that Zionts and Gaynor would continue in their positions in the combined company. J. Nelson, president and COO of Westell, will also remain in his position. |
