Signal Technology and LogiMetrics End Merger Talks
DANVERS, Mass. and BOHEMIA, N.Y.--(BUSINESS WIRE)--July 12, 2000--Signal Technology Corporation ("Signal") (Nasdaq: STCO) and LogiMetrics, Inc. ("LogiMetrics") (OTCBB: LGMTA) announced today that they have terminated discussions relative to Signal's proposed acquisition of LogiMetrics. Under the provisions of a non-binding letter of intent announced March 14, 2000, Signal proposed to acquire LogiMetrics through the merger of a wholly owned subsidiary of Signal with and into LogiMetrics.
"LogiMetrics is a fine company, but we were unable to finalize our transaction because we could not agree on an appropriate price," said Signal Chairman and Chief Executive Officer George Lombard. "In light of recent successes of the Signal Wireless Group, we now believe that we are better off pursuing in-house development of the type of point-to-multipoint radio product line that we had expected to acquire with LogiMetrics. In addition, Signal will continue to explore other potential acquisitions that can further accelerate our expansion into the fast-growing commercial wireless broadband communications infrastructure market."
In connection with the letter of intent, Signal loaned approximately $2 million to LogiMetrics for working capital and other purposes. Concurrent with the letter of intent, certain existing investors in LogiMetrics loaned the company approximately $1 million. According to its terms, Signal's loan, together with accrued interest, is scheduled to be repaid next week.
Also in connection with the letter of intent, LogiMetrics granted Signal the option to purchase its Bohemia, New York - based high-power amplifier business for the purchase price of $2 million less the unpaid portion of any loans made by Signal to Logimetrics.
Since the execution of the letter of intent, Signal has been managing and operating the New York power amplifier business, has assumed certain current liabilities of the business and has been making interest payments on LogiMetrics' outstanding bank indebtedness. "Signal intends to exercise its option to remove the New York business back to LogiMetrics," Lombard said. Under the terms of their agreement, in the event that Signal returns the LogiMetrics New York power amplifier business, Signal is entitled to reimbursement of amounts expended by Signal in connection with the operation of that business, including the interest payments it has made on LogiMetrics' outstanding bank indebtedness. |
