The acquisition has been approved by the board of directors of each company and is subject to various closing conditions. Founded in 1975, US Software, a profitable company has 25 employees all based in Hillsboro, Oregon, and is headed by CEO, Donald Dunstan.
Under the terms of the agreement, Lantronix common stock and cash worth an aggregate value of approximately $7.0 million dollars will be exchanged for all outstanding shares and options of US Software. Lantronix will also issue up to an aggregate of approximately $9.75 million of its common stock to the shareholders of US Software if certain revenue and profit milestones related to the US Software business are met through June 30, 2004. This acquisition will be accounted for as a purchase and is expected to be completed prior to the end of 2000. In connection with the acquisition, Lantronix expects a operating profit gain of approximately $0.01 per share for fiscal 2001. Also under the terms of the agreement, all employees of US Software will remain with the Company.
Fred Thiel, CEO of Lantronix, commented, Acquiring US Software’s 25 years of experience and high level of engineering expertise will further the capabilities of Lantronix’s Device Server(TM) Technology and strengthen the Company’s position in the rapidly growing market, by enabling core elements of Device Server(TM) Technology to now run on the most popular embedded hardware platforms, opening up new opportunities for Lantronix and its customers. Lantronix expects this acquisition to be accretive to the company’s earnings and we believe it will help us accelerate our revenue growth rate in fiscal 2002.
Mr. Thiel continued, The flexibility of US Software’s Real-Time Operating System (RTOS), protocols, and applications will enable Lantronix to rapidly fulfill the needs of our diverse customer base by delivering complete network enabling technology in less time on a wide variety of embedded hardware solutions. Additionally, US Software’s strong presence in key markets and relationships with strategic customers will facilitate the expansion of our customer base. This merger fits with Lantronix’s strategy of being a leader in embedded network connectivity
Don Dunstan, CEO of US Software, stated, We are pleased to have reached this agreement with Lantronix and feel the synergies between our technologies and corporate philosophies make this an ideal situation in many ways. We look forward to making the transition and the combined resources of Lantronix and US Software will allow us to further grow the business and extend our leading position worldwide.
