Sencore, a video processing specialist that makes satellite/receiver decoders, transcoders and test and measurement gear used by large broadcasters, aims to acquire Wegener, which makes satellite receivers and cache servers used by Fox's cable networks and others. The companies announced today that they have entered into a non-binding letter of intent regarding a possible acquisition of Atlanta-based Wegener by Sioux Falls, S.D.-based Sencore, for $6 million in cash.
Wegener has faced financial problems in recent years, including the receipt of delisting notice from NASDAQ last year. The company reported a loss of $883,000 for its fiscal third quarter, which ended May 29, 2009, off revenues to $2.9 million. The company did introduce several new products in the quarter, including CompelConnect.com, a Web-based network control system that Wegener is offering as a software-as-service (SaaS) and the iPump 525 IP media player, which designed for video services that require customization on a site-by-site or regional basis.
Sencore says the combined company would have great management expertise and engineering knowledge in content delivery and would be able to offer expanded products and achieve operational efficiencies.
"I am excited to explore a possible acquisition of Wegener Corporation by Sencore," said Sencore CEO John Suranyi in a statement. "Wegener's employees, products and markets will be an excellent complement to Sencore's content delivery business. Combined, we believe that the company will generate substantial synergies and efficiencies in product development, marketing, administration, manufacturing, sales and distribution while delivering superior technology solutions and support to our customers."
According to documents filed by Sencore with the SEC, the proposed purchase price of $6.0 million assumes that Wegener is free of all debt, taxes payable, accrued transaction expenses and any amounts due to related parties. The per-share consideration to common shareholders would be reduced to reflect any anticipated amounts of these items as of the closing date. The purchase price also assumes that Wegener will have adequate working capital at the time of the sale, and could be reduced if this is not the case.
"Sencore is a quality organization that we will be pleased to join," added Robert Placek, Chairman and CEO of Wegener Corporation, in a statement. "The combination of Sencore and Wegener Corporation should provide our customers continued access to innovative products and the exceptional support they have come to expect from Wegener. We also believe that Sencore's global distribution capabilities will lead to a wider market for Wegener's products."