Calgary-based Wi-LAN Inc. has sold its controlling interest in U.S. technology company Digital Transmission Systems (DTS).
A DTS Employee Stock Ownership Program (ESOP) assumed controlling interest in DTS on Dec. 31. The transaction with the ESOP liquidates all Wi-LAN equity holdings in DTS.
“DTS was a good acquisition in January 2000, but the market has changed and we now need to focus on our core wireless business,” said Hatim Zaghloul, president, chairman and CEO, Wi-LAN Inc.
“The sale of the DTS ownership completes the series of transactions that were anticipated through non-cash special charges and asset writedowns recorded in the third-quarter consolidated financial results of Wi-LAN,” said Steve Bellamy, chief financial officer for the company.
In addition to the acquisition of common stock held by Wi-LAN, all DTS debentures and preferred stock previously owned by Wi-LAN will be converted into common stock immediately.
After the conversion, DTS common stock outstanding will be approximately 15.9 million shares, of which the ESOP will have rights to purchase approximately 10 million shares from Wi-LAN.
The price per common share to be paid by the ESOP to Wi-LAN will be determined by a fairness opinion to be rendered from a third party within 30 days. DTS’s common stock has closed between 10 cents and 15 cents per share in the last 30 days of OTC trading.
A portion of the proceeds of the sale will be paid to Wi-LAN immediately and payment of the balance is expected within 12 months.
