Deal unites wireless billing companies
Lightbridge nabs Latin America foothold via Corsair
cbs.marketwatch.com
By Tim Eaton, CBS MarketWatch
Last Update: 5:53 PM ET Oct 26, 2000 NewsWatch
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BURLINGTON, Mass. (CBS.MW) -- Lightbridge Inc., a company specializing in prepaid billing for the wireless industry, agreed Thursday to buy another company in the sector, Corsair Communications, in a $165 million stock swap that will stretch Lightbridge's reach into Latin America.
Most of Lightbridge's customers, which include AT&T Wireless, Nextel and Sprint, are in the U.S. By acquiring Corsair, the company will extend its business into the growing Latin American wireless market, home to some 90 percent of Corsair's customers.
The deal states that Burlington, Mass.-based Lightbridge (LTBG: news, msgs) will acquire Palo Alto, Calif.-based Corsair (CAIR: news, msgs) by issuing 10.5 million shares of its common stock. Terms set 0.5978 Lightbridge share for every share of Corsair stock. Based on Corsair's closing price on Wednesday, the acquisition -- which will give Corsair shareholders 36.5 percent ownership of Lightbridge -- was worth about $165 million.
Since the announcement, the value of the deal eroded nearly 20 percent to $133 million as shares of Lightbridge eased. Pamela D.A. Reeve, president and chief executive of Lightbridge, said she expected the drop in price, citing normal market fluctuations after an acquisition.
The deal is expected to close in the first quarter of 2001 and will trade under Lightbridge's Nasdaq symbol, the companies said in a joint statement.
Lightbridge Chief Financial Officer Harlan Plumley told CBS.MarketWatch.com that "neither company went in this with the intention of layoffs."
Reeve, will be CEO of the combined company, which will be based in Burlington, Mass. Tom Meyer, chief executive of Corsair, will assume the roles of president and COO of the new company.
Shares of Corsair rose 25 cents to $7.19. Lightbridge shares fell $2.50 to $13.13. |
