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Technology Stocks : Telxon (TLXN)
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To: Jatin Kadakia who wrote (14)12/31/1996 9:06:00 AM
From: Todd W. Arden   of 378
 
I have broken apart the individual pieces of TLXN to determine the true
fundamental value of the company. Placing a value of $140m (2x revenue)
on the Aeronet subsidiary along with the $65m received from the Itronix
sale, the bar code business is currently valued at $103m after debt is excluded
from the enterprise value. This translates into a revenue multiple of .29x
the entire bar code business ($350m annually).

This is in comparison to both Symbol (2x revenue) and Norand (.8x revenue).
Placing a multiple of .8x revenue on the bar coding business, TLXN would trade
at $23 per share. It should be noted that this calculation assumes a 2x revenue
multiple for Aeronet while Proxim trades at approximately 4.5x current revenues.

With the restructuring currently being implemented by Frank Brick as well as the
prospect of a profitable second half, the risk/reward ratio is very favorable.
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