Science & Technology
Science and Technology
Science and Technology
Mon, January 5, 2009 Multiband Corporation Completes Acquisition of 80% Ownership Of DirecTECH Operating Subsidiaries
MINNEAPOLIS--([ BUSINESS WIRE ])--Multiband Corporation (NASDAQ:[ MBND ]), the nation's largest DIRECTV Master System Operator ("MSO") for Multiple Dwelling Units, announced today that it has completed the initial closing of its previously announced November, 2008 Stock Purchase Agreement with DirecTECH Holding Co, Inc. a Delaware corporation ("DTHC"), the successor agreement to the original 2007 merger agreement with DTHC. Under the revised agreement Multiband purchased 80% of the issued and outstanding shares of common stock of all DTHC operating subsidiaries (except for Michigan Microtech, Inc., a Michigan corporation ("MMT") of which Multiband previously purchased 51% of the MMT stock in January and early February, 2008, and of which Multiband has now purchased an additional 29% of the MMT stock), for $ 41.2 million. This purchase price was amended subsequent to November, 2008 and prior to the initial closing due to DTHC's retirement in December, 2008 of its approximately$11.5 million of bank debt, which Multiband had previously agreed to assume. Under the terms of the original agreement, announced in 2007, DTHC's stockholders would have owned approximately 77% of the combined company. Under the new structure, Multiband issued no additional equity to acquire the 80% interest. Multiband will consolidate the operating results of all of the former DTHC subsidiaries with its operating results. As of the close of the initial phase of the acquisition, Multiband has approximately 9.6 million shares outstanding and expects 2009 revenues to be approximately $200 million. The closing on the balance of the acquisition is anticipated to occur on or before December 31, 2009. Beginning January, 2009,
""We are pleased that we have been able to restructure this transaction in a way that has dramatically reduced the dilution for Multiband shareholders in the initial closing with DTHC," said James L. Mandel, CEO of Multiband. "We are now positioned to leverage our new size and scope into a truly world class entity capable of driving superior, sustainable earnings and growth while providing exceptional customer satisfaction through an expanded array of products and services."
The consideration for the acquisition included a $0.5 million payment at closing, a $0.5 million interest-free demand note and the issuance of a four-year $ 40.2 million Note, which has an interest rate of 8.25% per annum. Multiband expects to purchase the remaining 20% of the issued and outstanding shares of common stock of all DTHC operating subsidiaries by December 31, 2009. The consideration for the 20% purchase will be $10 million worth of Multiband Series J Preferred Stock, whose issuance will require Multiband shareholder approval. The Preferred Stock will convert into Multiband Common Stock at $2 per share.
On October 31, 2007, Multiband and DTHC had entered into an agreement to merge. On February 6, 2008, the parties extended the time to reach a definitive agreement on the transaction from March 31, 2008, to December 31, 2008. The initial closing of the transaction as restructured occurred on January 1, 2009.
About Multiband
Multiband Corporation is a leading provider of software and integrated billing services; including video, voice, data and other value-added local services to multiple dwelling units (MDU's) on a single bill, directly and through strategic partnerships. Multiband also is an exclusive DirectTV master system operator. Multiband is headquartered in Minneapolis, MN and has offices across the United States, as well as a state of the art service and support center located in Fargo, ND providing call center capabilities and other value-added services.
Safe Harbor for Forward Looking and Cautionary Statements
Statements included in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve a number of risks and uncertainties such as competitive factors, technological development, market demand and Multiband's ability to obtain new contracts and accurately estimate net revenues due to variability in size, scope and duration of projects, and internal issues in the sponsoring client. Further information regarding potential factors that affect Multiband's financial results can be found in Multiband's Registration Statement and in its Reports on Forms 8-K filed with the Securities and Exchange Commission
