Modem and graphics hardware upstart Boca Research Inc has stepped in to put the gran’daddy of the personal computer modem business out of its Chapter 11 bankruptcy misery: it is to acquire the much bigger Hayes Microcomputer Products Inc under terms of a letter of intent signed late Thursday. Good news is that the takeover will generate enough cash for Atlanta-based Hayes to complete its plan of reorganisation to pay all creditor claims 100%, with interest. Although founded in 1985, Boca recognises that having gone public only in 1993, it is not a name on everyone’s lips, and the resulting company will also be named Hayes to optimise the name-brand recognition worldwide. Boca Research is paying 1.685m new shares for Hayes, putting a lowly indicated valuation on the company of $29.7m, but it will also grant Hayes holders rights to contingent payments based on the future earnings of the merged company. There are more hurdles than the usual due diligence, negotation of definitive agreements and Boca shareholder vote: the deal is also conditional on completion of debt financing for the merged company, and confirmation of the Hayes reorganisation plan by the bankruptcy court, but since creditors are to be paid in full, that should not be a problem. Dennis Hayes will be the largest shareholder of the new Hayes, with the title of vice-chairman. For the year to December 31, and the quarter to March 31, Boca Research reported sales of $83.6m and $27.3m respectively. For the year to September 30, and the half to March 31, Hayes generated sales of $246.9m and $135.2m respectively. Boca’s current board-level enhancement and networking products include facsimile, data and speech modems, video, telephony, sound, speech and data multimedia boards, networking, video graphics, and input-output, interface device enabler and multiport lines.
