Global Data to acquire StarComm Products
GDI Global Data Inc GI
Shares issued 14,500,000 Jan 19 close $0.97
Thu 20 Jan 2000 News Release
Mr. Lawrence Davis reports
GDI Global Data has entered into a letter of intent to acquire StarComm
Products Inc., a leading developer of industrial rated modems, digital
subscriber line (DSL) devices and custom communications modules for
utility, transportation and security markets, for $1.6-million (U.S.) in
Global Data common shares and cash. This acquisition will strengthen both
Global Data and StarComm's ability to provide customers with leading edge
communications products and engineering services.
Completion of the transaction is subject to execution of definitive
documentation, financing and all regulatory approvals.
StarComm is a market leader in the development of innovative communications
products for secure access, data collection and transmission in harsh
environments characterized by extreme temperature and/or humidity, rugged
usage and severe electrostatic discharge (ESD). StarComm's complete line of
modems, controllers and data collection devices are found in various
vertical markets including electronic funds transfer (EFT) for credit and
debit card transaction processing, security and card access applications,
intelligent transportation systems and supervisory control and data
acquisition (SCADA) applications for utility and telemetry markets. These
markets continue to be driven by a variety of factors including industry
deregulation in the case of the utility industry, government regulation and
government financing in the case of tntelligent transportation systems and
the continued evolution of communications technology. This demand is based
on market pressures for automated solutions to replace costly manual
operations.
"The addition of StarComm provides tremendous synergistic benefits to
Global Data. Adding StarComm's engineering expertise, strong product base
and development initiatives in emerging communications technologies
including DSL is extremely beneficial to Global Data," said Lawrence E.
Davis, president and chief executive officer. "StarComm's engineering and
product development expertise combined with Global Data's expanding
customer base of leading North American utilities forms the basis of a
profitable union. StarComm is an integral step in deploying our business
strategy of providing leading edge data communications solutions to our
customers."
Based in Huntington Beach, Calif., StarComm is a privately held
employee-owned company. It was founded in 1995 and employs 10 people,
including an engineering staff of five. StarComm president Phil Sutter will
continue as president of the StarComm business unit and assume the title of
chief technology officer of Global Data, reporting to Mr. Davis, Global
Data's president and CEO.
StarComm's product development efforts are focused on deploying circuit
switched and packet data services in a wide variety of commercial and
industrial applications. StarComm's DSL products will enable customers to
transition their existing networks to a new generation of communications
technology offering higher performance and reliability at reduced costs.
"Joining forces with Global Data is the right move for us," said Mr.
Sutter, president of StarComm. "Global Data has the market focus and
entrepreneurial management team that will enable StarComm's next generation
products to achieve market leadership."
DSL solutions, ranging from ISDN to xDSL, allow the installed base of
twisted-pair wiring in the telecom local loop to be used for high-volume
data transmission. Its many variants are emerging as competing ways to
offer greater bandwidth to customers. In the near future, DSL technologies
will offer commercial and industrial users the same cost-effective
solutions now being deployed for residential, small business and branch
office subscribers.
Analysts forecast that the entire DSL market is set to take off, with
projections of seven million DSL lines in service by 2002, compared with
fewer than one million today. By 2003, the market is expected to rise to
$4-billion (U.S.), almost 40 times last year's estimated total of
$103-million.
The transaction is expected to close in the first quarter of 2000.
Global Data's planned acquisition of StarComm is consistent with its
commitment of developing products for an ever expanding range of solutions
based on advanced wireless and wire line technology. StarComm will continue
to serve its growing customer base, in addition to applying its proprietary
technology to Global Data's various customer requirements for fast, secure
and reliable communications networks.
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