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UTStarcom buys Audiovox CDMA handset division

Posted: 17 Jun 2004 ?? ?Print Version ?Bookmark and Share

Keywords:cdma? handset? wireless? mobile phone?

Chinese equipment manufacturer UTStarcom has acquired Audiovox's CDMA handset division in a deal valued at $165.1 million in cash.

UTStarcom is no stranger to developing handsets for the wireless sector. The company has long built mobile phones for its proprietary PAS wireless access networks.

However, since March of 2004, the company has been trying to build on its success with PAS technology by entering the CDMA space. To make this move, the company has inked a licensing agreement with Qualcomm, partnered with IP Wireless, and has acquired Hyundai Syscomm and Telos. Now, through the acquisition today, the company gains access to a group that has long developed CDMA phones.

Under the terms of the deal, UTStarcom will purchase select assets and liabilities from Audiovox, including inventories, prepaids, third-party payables, accrued expenses, as well as approximately 269 employees. Philip Christopher, chief executive officer of ACC, will run the UTStarcom's non-PAS handset sales, service, and support division in North and South America.

The transaction is expected to close in the fourth quarter, pending regulatory, Audiovox shareholder, and other approvals.

In conjunction with its Audiovox acquisition, UTStarcom also restated its guidance for 2004. The company had given guidance of revenues of $2.75 billion and GAAP EPS guidance of $1.85 per share for fiscal year 2004. Based on the acquisition of ACC, UTStarcom now projects revenues of $2.95 billion in 2004 and $4.3 billion in 2005. The company also projects overall gross margins in excess of 27 percent for both 2004 and 2005.


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