Subject: [NEXTEL-1] UTStarcom To Acquire Audiovox Handset Division

From: [email-masked]
Date: Tue, 15 Jun 2004 15:34:07 -0400

UTStarcom To Acquire Audiovox Handset Division
6/14/2004

Acquisition complements UTStarcom global wireless strategy, builds on
company's scale and cost leadership in wireless handset design,
sourcing, and
manufacturing

Alameda, CA -- UTStarcom today announced an agreement to acquire select
assets of Audiovox Communications Corporation (ACC), the wireless
handset division of Audiovox Corporation, for a purchase price of $165.1
million in cash. UTStarcom believes the acquisition is a key milestone
in its entry into the CDMA marketplace, announced in March 2004,
providing the company with a comprehensive sales, service, and support
platform; a well-recognized CDMA handset brand, fully certified for the
U.S. market; access to long-standing supply-chain channels; strong
product marketing expertise; and key relationships with top-tier CDMA
operators, particularly in North and South America.

Through a combination of organic growth, CDMA and WCDMA licensing from
Qualcomm, a development partnership with IPWireless for TDCDMA
technology, and strategic acquisitions, including Hyundai Syscomm,
TELOS, and now ACC, UTStarcom has created a full-solution CDMA business
and product line that complements its highly successful wireless PAS
portfolio. By pursuing this strategy, UTStarcom believes it will be able
to rapidly grow its customer and revenue base across multiple
international markets. PAS and CDMA are currently some of the fastest
growing wireless standards in the world, and are expected to expand by a
record 30 million and 40 million plus users in 2004, respectively,
according to recent industry research.

"UTStarcom is already the single largest handset provider in China, the
largest, and most cost-competitive market in the world. We currently
offer more than 30 different feature-rich handsets, from high-end to
low-cost models. We shipped over 16.5 million units in 2003 and expect
to ship between 18 to 20 million in 2004," said Hong Lu, president and
CEO of UTStarcom. "We believe the acquisition of ACC extends our handset
leadership internationally and accelerates time to market with a proven
brand; a tremendous sales, service, and support platform; and top-tier
U.S. operator customers, such as Verizon and Sprint. UTStarcom intends
to continue to maintain ACC's current supply relationships to fill the
sales channel, while also growing market share. We believe we will be
able to increase operating efficiencies by broadening the supply chain
with UTStarcom's own CDMA handset designs, manufactured in China, using
components, suppliers, and facilities already in place for high-volume
production of PAS handsets. We already have CDMA handsets in
development."

Under the terms of the deal, UTStarcom will purchase, for $165.1 million
in cash, select assets and liabilities, including inventories, prepaids,
third-party payables, accrued expenses, as well as approximately 269
employees. Philip Christopher, with 20 years of experience as chief
executive officer of ACC and 30 total years at Audiovox, will run the
non-PAS handset sales, service, and support division in North and South
America.

Added Mike Sophie, chief financial officer of UTStarcom, "By driving
incremental revenues from UTStarcom designed-and-manufactured handsets
through the ACC sales channel, we believe we can leverage the extremely
efficient manufacturing capability and cost structure we have already
developed in China, giving UTStarcom the ability to drive a significant
amount of net income accretion and shareholder value."

The transaction is expected to close in the fourth quarter, pending
regulatory, Audiovox shareholders', and other approvals.
Source: UTStarcom
 http://www.wirelessdesignonline.com/nl/97866/793725

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