Audiovox Completes Sale of Cellular Subsidiary Business
Nov 3, 2004
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Consumer electronics manufacturer Audiovox Corporation announced it has completed the sale of its cellular subsidiary's business, Audiovox Communications Corp. (ACC), to UTStarcom, Inc. The deal, initially announced in June, officially closed on November 1 after receiving regulatory and shareholder approval.
As previously announced, Audiovox's majority owned subsidiary entered into a definitive agreement to sell selected assets and liabilities (excluding its receivables, inter-company accounts payable, and certain accrued expenses) to UTStarcom for a total purchase price of U.S. $165.1 million in cash. Pursuant to the terms of the agreement, net proceeds from the sale, after repurchasing Toshiba's equity interest; paying executive and professional service fees and estimated taxes; collecting the outstanding receivables, and paying down the Audiovox's bank lines will be approximately $145 million.
"We are pleased with the overwhelming shareholder response in favor of this transaction as it reinforces our belief that this sale is in the best interests of Audiovox and its shareholders," stated John J. Shalam, chairman, president and CEO of Audiovox Corporation. "In the months ahead our plans are to focus on the continued development and growth of our Electronics company as well as exploring other business opportunities.
Mr. Shalam added that over the past three years, Audiovox's Electronics company has seen significant growth due to the addition of new product categories and expansion of existing products. He also said several synergistic acquisitions have contributed to growth.
"The net proceeds from [this] transaction will give Audiovox Corporation substantial capital, which in turn will place us in a strong position to further enhance the Audiovox brand and expand our presence, both in the U.S. and in Europe," Mr. Shalam continued. "We are excited about the next phase in our corporate evolution and look forward to updating our shareholders on our plans for the future as they materialize."
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