In a deal valued at more than $140 million, Simi Valley-based Micom Communications Corp. has been spun off by its Pennsylvania parent and is now operating again as an independent, publicly held concern.
Micom, a market leader in providing computer networks that integrate data, voice and fax communications between companies' remote locations, thus goes public on its own for the second time. The firm was publicly held in the 1980s, then went private prior to being acquired by Pittsburgh-based MB Communications Corp.
MB decided to spin off the subsidiary to reduce its tax load and to allow the stock market to better evaluate the two companies' worth, reports Francine M. Good, Micom's vice president and chief financial officer.
She noted that MB's Black Box Corp. unit provides some products similar to those offered by Micom. "The feeling is that each company will now achieve its appropriate market value," she said.
The spinoff came in the form of a tax-free dividend distribution, with holders of every three shares of MB receiving two newly issued shares of Micom. Good said the formula created 10.8 million Micom common shares.
The new shares traded in the $13 range on NASDAQ last week, giving Micom a total paper value of more than $140 million.
Good said that Micom's president and chief executive, Barry Phelps, will continue in that position and that no policy or personnel changes are planned. "We operated with a great deal of independence before the spinoff; that should help make the transition smooth."
Micom has a payroll of 400, making it one of Simi Valley's largest employers. Good said the Simi Valley firm's revenues totaled $81 million in the year that ended March 31.
Micom claims to be the world's leading provider of low-cost integrated networks for communication over wide areas.
Odyssey Partners, a New York limited partnership that is a major MB shareholder, became a large Micom shareholder as a result of the stock distribution, Good said.