Multiband Won’t Complete Acquisition of WPCS
Multiband Corporation said Tuesday that it will not complete its planned purchase of Exton, Pennsylvania-based WPCS International Incorporated.
New Hope-based Multiband-which installs video, voice, and data systems in apartments and is a home service provider for DirecTV-said that the transaction “is not viable” given “current market valuations.”
Multiband in June signed a non-binding letter of intent to buy WPCS for $3.20 per share-a deal valued at roughly $22 million. Shares of WPCS' stock closed at $2.23 the day before Multiband made its announcement about its intended purchase. But the company's shares closed at $1.70 on Monday.
The letter of intent expires Wednesday. It gave Multiband exclusive rights to negotiate a purchase of WPCS. The agreement included a provision that prohibited Multiband from selling any of its 709,271 common shares of WPCS; that restriction will be lifted with the expiration of the letter of intent.
Although Multiband isn't completing the acquisition, it did complete a small part of the deal on September 1. The company paid $2 million for WPCS operation centers in St. Louis and Sarasota, Florida, renaming the acquired business Multiband Engineering and Wireless. The two locations-which together employ more than 60-are now performing above pre-acquisition levels, Multiband said.
“We continue to have a vested interest in the success of WPCS as a friendly shareholder and expect to work closely with them regarding any future items of mutual interest,” Multiband CEO James L. Mandel said in a statement. “The engineering and wireless intellectual properties that we acquired in September of 2011 have led to further opportunities to diversify our revenue stream.”
WPCS is a design-build engineering company that provides wireless communication, specialty construction, and electrical power to public services, health care, energy, and corporate enterprise markets worldwide.
Multiband is among Minnesota's 60-largest public companies based on revenue, which totaled $265.6 million in 2010. The company's 2011 financial results have not yet been released.