Under the terms of the deal, the world’s second largest mobile phone maker said it would acquire all of the outstanding shares of Terayon’s common stock for $1.80 per share, well down from $142 mark its shares were trading at when it held its IPO seven years ago.
Terayon has undergone a number of financial problems in recent years. Sales have been falling for the past three years and in November 2005 it announced that would have to restate accounts after discovering that revenue recognized in the second half of the 2004 financial year could have been recorded in incorrect periods.
In January 2006 the Santa Clara, California-based company warned it could be delisted from Nasdaq, and it said that holders of $65m of loan notes might demand to be repaid immediately, as a result of its failure to file its 10-Q form for the third quarter of 2005 with the SEC.
The company has since been relegated to the second tier Pink Sheets market, but most of its legal issues with the SEC and shareholders have now been resolved.
Terayon provides digital video networking applications to cable, satellite, and telecommunication service providers. Its CherryPicker system allows service providers to offer content-based on the regional interest of viewers. It can also insert digital adverts, graphic overlays, and channel branding.
