Thousand Oaks, California-based Xircom Inc is in negotiations to create an independent wireless local network company through a management buyout of its Netwave Wireless local network arm. Under the terms of the proposed agreement – which has been approved by the Xircom board of directors – 80% of the division would be sold to the management, with Xircom retaining the remainder. No further financial details about the terms of the agreement have been released. The new company would likely keep the Netwave name, and be headed by Jerry Ulrich, currently chief operating officer and chief financial officer of Xircom. Dirk Gates, Xircom’s chairman, president and chief executive officer would be appointed as a member of the board of Netwave. The new company would have full rights to the entire Netwave product line, including product inventory and rights to all Netwave technology and intellectual property, although Xircom would continue selling the line for an unspecified time after the deal closes. Xircom hopes to complete the deal in its fourth quarter to September 30. The rationale for the buyout is that Xircom believes it is impractical to devote the resources and focus required to pursue the wireless market, according to Gates. Additionally, it is intended to release over $600,000 per quarter, which currently goes in Netwave operating expenses. As a result of the plan, Xircom plans to concentrate on its line of PC Card mobile communications systems.
