Terabeam snatches Proxim in bankruptcy court
Price hike from $21 million to $28 million for one-time Wi-Fi name.
By Peter Judge | Techworld | Published: 16:05, 21 July 2005
Wi-Fi veteran Proxim, whose assets were to be bought by Moseley Associates, has gone to a higher bidder at the bankruptcy court.
Wireless broadband player Terabeam will pay $28 million for the assets of the one-time Wi-Fi leader, adding $7 million to the $21 million price agreed by Moseley in June.
The price increase reflects growing appreciation od Proxim's assets, after the bankruptcy process clears off the debt attached to the company. In particular, the company's Tsunami point-to-point wireless broadband products were developing into a WiMax range, which figured large in Moseley's plans.
Like Moseley before it, Terabeam has promised, in its Terabeam press release, to continue to sell and support Proxim's products.
Proxim is surprised but happy: "At the time [of the Moseley agreement] we indicated that the final acquisition would be completed after a bidding process," said a Proxim statement. "Although we did not anticipate another company stepping in with a higher offer, we are excited that Terabeam Wireless did emerge from the process as the higher bidder and future parent of Proxim." Terabeam is well-respected and aligned with Proxim’s long-range objectives, said the statement.
Terabeam is a smaller and less diverse company than Moseley, and plans to move its headquarters to Proxim's building.
Although Terabeam and Proxim have both been working on WiMax the two are using rival chips. Terabeam announced a decision to use Fujitsu's chips in May, while Proxim has been develop WiMax kit with Intel since last May.
Proxim's more developed WiMax range may prevail over Terabeam's Fujitsu-based plans, but having a stake in both versions of WiMax may not be a problem this early in the game, said analysts: "There's no harm in covering the bases," said Richard Webb of Infonetics Research.
Terabeam itself has a chequered history. The company spent several years, and $500 million, promising to deliver gigabit wireless speeds through free-space optics. When it failed to deliver on the hype, it was bought for around $50 million (described by Light Reading as "peanuts") by microwave wireless company YDI.
YDI had then changed its name to Terabeam, probably because even a failed start-up will have more brand-recognition than a random-sounding three-letter acronym.
