updated 04:25 pm EDT, Tue July 1, 2008
UTStarcom sells handsets
Budget cell phone maker UTStarcom will sell its cellular handset distribution division to an investment group primarily owned by AIG Vantage Capital. UTStarcom bought the handset operation from Audiovox less than four years ago and supplies more than 20 mobile carriers, posted a net loss of $195.6 million in the last fiscal year. The sale is part of a restructuring effort and follows the company's announcement to sell its Mobile Solutions Business Unit earlier this year.
The deal is worth about $240 million initially, though UTStarcom could get up to $50 million more over the course of three years if the new venture, to be named Personal Communications Devices (PCD), meets unspecified financial goals. UTStarcom will keep a two percent stake in the new company and sell handsets in North and South America, and directly to carriers in other parts of the world.
The sale will allow UTStarcom to focus on its core IP-based communications products in growing economies in Asia, Latin America and eastern Europe, among others. [via TWICE]