(From the 10Q of June 00)
" NOTE 9. LANCITY TRANSACTION
During the first quarter of 1999, the Company completed the combination of the Broadband Technology Division of Nortel Networks (LANcity) with Arris
Interactive, LLC, a joint venture between ANTEC and Nortel Networks. This combination was effected by the contribution of the LANcity assets and business into Arris. ANTEC's interest in the joint venture was reduced by 6.25% from 25%
to 18.75%, while Nortel's interest was increased from 75.0% to 81.25%.
In connection with the transaction, the Company recorded a pre-tax gain of $60.0 million, net of related expenses, based upon an independent valuation of LANcity. The transaction was accounted for, in effect, as if it were a gain on the sale of a 12.50% interest in Arris to Nortel in exchange for 12.50% of LANcity. The Company has elected to recognize gains or losses on the sale of previously unissued stock of a subsidiary or investee based on the difference between the carrying amount of the equity interest in the investee immediately before and after the transaction and deferred income taxes are provided on such
gain.
The Company's interest in Arris was subject to further dilution based upon its performance over the eighteen-month period ended June 30, 2000. At the expiration of the eighteen-month period, no further dilution of ANTEC's share occurred, and, based upon the initial independent valuation, ANTEC recorded an
additional gain of $30.0 million to reflect the Company's final ownership percentage in the joint venture of 18.75%."
sec.gov
As I recall from the conference, the CEO said that ARRIS is a profitable company. With the revenue of 500 millions, NT and ANTC could spin off this baby and IPO it for at least $15/share.
With the price of ANTC $12.18/shares at the close of yesterday, I'll say ANTC is a steal.
Hope the CC goes well. |
