San Diego Company to Buy Irvine-based STM Wireless
Struggling STM Wireless, an Irvine-based provider of telecommunications in rural areas using satellite networks, said Wednesday that it agreed to be acquired by San Diego-based Remec Inc. in a stock swap.
Under the tentative agreement, STM stockholders would receive one share of Remec stock for every 3.8 shares of STM stock they own. Based on the Wednesday closing price of Remec’s stock--$17.38 a share--the transaction would be worth nearly $32.2 million.
Just last month, STM said it would terminate an unspecified number of its 140 employees as part of a restructuring. The work force has been evenly divided between the company’s headquarters in Irvine and offices in suburban Atlanta.
Last week STM reported that its losses widened in the fourth quarter and full year in 1998. STM had blamed its financial woes on weakness in Latin American and Asian economies.
For the quarter, losses ballooned to $9.8 million from $4.1 million in the same period a year earlier. The company lost $9.4 million for the full year, up from $2.1 million in 1997.
Things had looked brighter for the 17-year-old company in 1997 when it announced that it had landed a 10-year contract valued at more than $100 million to provide and maintain a nationwide satellite network for telephone and data communications in Mexico.
It was unclear whether STM’s two offices will remain open, or what will happen to STM’s employees or executives if the deal is completed.
STM and Remec officials did not return phone calls Wednesday.
STM Chairman and Chief Executive Officer Emil Youssefzadehg said in a prepared statement that his company has been “working closely” with Remec for three years.
“We believe that the melding of our international communications market presence, product concepts and systems capability with the design and manufacturing prowess of Remec and its strong financial resources will allow STM to reach its full potential,” Youssefzadehg said.
The agreement is subject to approval by both companies’ boards and STM stockholders.
STM Wireless stock closed Wednesday at $3.63 a share, down 63 cents.
