OTTAWA – Wi-LAN and Tri-Vision International announced today that the two companies intend to get together.
Specifically: "they have signed a non-binding letter of intent ("LOI") for a business combination under which Tri-Vision’s common shares would be exchanged for common shares of Wi-LAN based on a price of $1.72 per Tri-Vision common share (the "Transaction"). On a fully-diluted basis, the Transaction values Tri-Vision at approximately $108 million."
Tri-Vision is best known for its V-chip technology for which it owns the North American patent rights and licenses to TV set manufacturers. Tri-Vision’s U.S. Patent licensing campaign now includes 42 licensees, representing approximately 25% of the U.S. market for digital TV sales. Tri- Vision has licensed approximately 98% of the Canadian TV market and resorted to legal action in five cases. All cases reached a favourable conclusion.
Companies which have been licensed to the U.S. and/or Canadian patents include: Sony, Hitachi, Sanyo, Pioneer, Philips, JVC, Panasonic, Sharp, LG Electronics, Samsung, Funai, Orion, Apex, Korat Denki, World, Eastech, Toshiba, eRAE, Seiko Epson, Xiamen, Shenzhen KXD, NewLane, Konka, TTE, Optoma, Coretronic, ViewSonic, Syntax-Brillian, NEC, AKAI, Chunghwa, Humax, Shinco, Jabil Circuit, LiteOn, Top Powersonic, Nakamichi, Emerson Radio, Esto, BenQ, Runco, Daewoo Tecwell, ProView, Redmond Group, and others.
"The combination of Wi-LAN and Tri-Vision will create a company that is more than the combined parts," said Jim Skippen, president and CEO of Wi-LAN, in the press release. "This is an excellent example of growing Wi-LAN’s IP portfolio in an adjacent market. Since many of the licensing targets are similar to both companies, we believe there will be excellent synergies realized by combining the companies. We believe that this transaction represents an excellent value proposition for our shareholders and we will benefit immediately from the revenue flows from existing Tri-Vision licensees."
"Based on our calculations, and based on forecasts of DisplaySearch and IDC for digital TV and set-top box growth, the existing licenses of Tri-Vision should yield approximately $100 million in future revenues." added Skippen. "Based on those same forecasts for growth and assuming the remainder of the Canadian and U.S. markets are signed at the same rates as existing Tri-Vision license agreements, Wi-LAN should be able to realize total revenues of approximately $500 Million over the next nine years."
"This Transaction provides tremendous value to Tri-Vision shareholders", said Tim Collings, Tri-Vision chairman and inventor of the company’s V-chip technology. "We have always been confident in the strength of our V-chip technology, but by merging our companies we will benefit from the additional licensing experience and financial resources of Wi-LAN, particularly in the US market. We look forward to working closely with Wi-LAN’s management to accelerate the growth of our business," he said.
However, Tri-Vision’s newest division, Think Broadband, will be sold off. "It is intended that Tri-Vision will divest its cable TV products and distribution business," says the release.
Think has been supplying small cable companies in Canada with digital cable solutions and it’s not known at this point how Think will be affected. A company representative and Cartt.ca will chat on Wednesday.
