Multiband Announces Expiration Of Letter Of Intent To Acquire WPCS International Incorporated
MINNEAPOLIS, Jan. 31, 2012 /PRNewswire/ -- Multiband Corporation, (NASDAQ:MBND), a leading Home Service Provider (HSP) for DIRECTV and the nation's largest DIRECTV Master System Operator (MSO) for Multiple Dwelling Units (MDUs), today announced that it will allow a Letter of Intent for the remaining portion of an acquisition with WPCS International Incorporated (NASDAQ: WPCS) to expire effective February 1, 2012 as the Company believes it is not viable to conclude the transaction as originally intended given current market valuations. This will result in Multiband losing exclusivity to negotiate a purchase of the remaining business operations of WPCS. The original agreement included a provision that during the exclusivity timeframe, Multiband would not sell any of the 709,271 common shares of WPCS International it currently owned. This restriction will now be lifted as well. The terms are consistent with those detailed in the parties' original June 2011 Letter of Intent.
James L. Mandel, CEO of Multiband, commented, "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. The engineering and wireless intellectual properties that we acquired in September of 2011 have led to further opportunities to diversify our revenue stream. The main driver behind the initial acquisition was that we believed the cost to develop these capabilities would have far exceeded the $2 million purchase price besides the fact that this provided incremental benefit over and above our existing run rate.
Multiband completed the initial portion of its previously announced letter of intent (LOI) for the acquisition of the WPCS operation centers located in St. Louis, Missouri and Sarasota, Florida effective September 1, 2011. The acquired business was renamed Multiband Engineering and Wireless and is currently performing above recent pre-acquisition levels. The purchase price of this portion of the acquisition was closed for a total of $2.0 million, including $1.25 million in cash and $750,000 of the escrow amount of $1.0 million from the original LOI. The two locations have over 60 employees and Multiband began consolidating revenues from these operations effective September 1. The additional opportunities that have resulted from the acquisition of the engineering and wireless divisions include:
- Established Multiband's renewable energy division for wind and solar design and deployment solutions.
- A Wireless Broadband Internet offing with connection speeds ranging from 40 Megabits per second up to 120 Megabits per second. First beta site completed and is outperforming initial design parameters.
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