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April 7, 1999

Hayes Modem Assets Bought By Zoom Telephonics

By CBR Staff Writer

The saga of modem pioneer Hayes Microcomputer Corp has finally come to an end with the announcement Wednesday that Boston-based Zoom Telephonics Inc has purchased most of the bankrupt company’s modem assets, including the Hayes, Practical Peripherals, Accura, Optima, Century 2, and Cardinal brands. Zoom also gets the product rights for the USA, Canada, South & Central America, Europe, and the Middle East. In addition, Zoom has acquired all the assets of Hayes Europe, including the ongoing operation headquartered in the UK. Hayes declared bankruptcy in February after the withdrawal of funds by the company’s main lending bank, NationsCredit, which then proceeded to sell off the company’s various units to the highest bidder.

The purchase cost Zoom a total of $5.3m, paid entirely in cash. In addition to the product rights, Zoom received more than $4m of hard net assets including cash, receivables, inventory, and equipment. Zoom is in discussions regarding the purchase of some of the remaining Hayes assets. The deal was a great one for datacommunications products vendor Zoom, as the brands and product rights purchased accounted for about $80m of Hayes’ sales in 1998. Also acquired were Hayes’ cable modem and DSL lab equipment. Zoom was founded in 1997.

Zoom said it plans to leverage the respected Hayes name and will actively market a broad array of Hayes-branded products in addition to its own. It will continue to manufacture the products using Hayes designs, and plans to add new products to the Hayes line in the future. To that end, it has hired several senior members of the engineering, sales, and marketing teams from the Hayes corporate headquarters in Atlanta to provide product and market continuity. It will continue to sell the products through existing Hayes distributors and resellers in the US and through the company’s retail channels in the UK. Zoom adds that it sees minimal downside from the investment and expects to see considerable upside, beginning in the second half of the current fiscal year.

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