U.S. Wireless Data Enters Agreement to Acquire CellGate Technologies
NEW YORK--(BUSINESS WIRE)--Oct. 31, 2000--
Purchase Will Expand USWD's Reach into the Fixed Wireless Market
U.S. Wireless Data (USWD) (OTCBB: USWE), the leader in wireless transaction services, today announced that it has entered into an agreement to acquire CellGate Technologies, the leading manufacturer of integrated wireless IP (Internet Protocol) modem adapters and a provider of wireless IP services for transaction processing.
This purchase will accelerate U.S. Wireless Data's expansion into the fixed wireless market by offering a cost-efficient means for merchants to convert their credit card terminals from landline to wireless data transmission. The assets acquired include an exclusive license to the AT&T Wireless technology that makes the conversion from landline to wireless transaction possible for traditional dial-up point of sale terminals and other dial-up devices. The acquisition will be made for approximately $10 million in cash and shares and is subject to certain conditions, including obtaining certain third party consents.
CellGate's wireless IP technology transports financial transactions faster and often at lower costs than conventional dial-up telephone service. It allows exisling point-of-sale terminals and dial-up ATMs to take advantage of wireless IP service without any other hardware or software modification.
"This is a great opportunity for U.S. Wireless Data to expand its offerings into the installed based of dial-up terminals immediately. In effect, the acquisition allows us to accelerate our business plan to penetrate the fixed wireless market," said Dean Leavitt, Chairman and CEO of U.S. Wireless Data. "While most people typically equate wireless only with mobility, wireless services have other benefits that appeal equally to both the fixed location and mobile merchant alike. Our acquisition of CellGate enables USWD to extend our technology to merchants who have already invested in dial-up terminals."
"By combining the two most meaningful companies in the wireless payments space, we are creating a firm that is able to provide a better solution to the rapidly growing fixed and mobile wireless transaction industry," added Jeffrey Connelly, CEO of CellGate Technologies. "Also, by sharing our technologies, we are able to greatly expand the markets we can service."
CellGate estimates that there are over 4 million terminals that could conceivably be converted from landline technology to a fixed wireless solution. By using the CellGate adapter, merchants can eliminate the monthly costs of phone lines for terminals and improve the speed of their transactions (wireless transactions take about 2-5 seconds, as compared to landline transactions that take about 10-20 seconds). In addition to faster and, in many cases, less expensive transaction costs, merchants have access to detailed transaction reporting and analysis via U.S. Wireless Data's Synapse(sm) platform.
Using the CellGate CBF2000, an integrated wireless IP modem adapter with proprietary technology that can work with any dial terminal, is as simple as unplugging the current terminal phone line from the wall and plugging the phone line into the adapter. No additional equipment purchase is required. Merchant acquirers, ISOs and transaction processors will be able to offer their customers access to a comprehensive solution immediately and without the additional expense of buying new wireless terminals.
"The combination of U.S. Wireless Data's Synapse platform and the CellGate adapter allows us to reach out to our more than 2 million existing dial-up customers and provide them with a wireless solution, without costly or time-consuming upgrades," said Steve VanFleet, senior vice president of product management and marketing for First Data Merchant Services, a client of U.S. Wireless Data and a leader in electronic commerce and payment services. "In addition, we foresee that this fixed wireless solution will open up the market to merchants that could not previously take credit cards because of speed issues, such as quick service restaurants, which potentially represent hundreds of millions of transactions." |
