Divestiture Allows Wi-LAN to Increase Focus on Core Broadband Wireless Business
(CALGARY, Canada - March 12, 2002) - Wi-LAN Inc. (TSE:WIN), an innovator of high-speed wireless data/Internet communications, today announced it has closed the sale of its controlling interest in Digital Transmission Systems (DTS) to a DTS Employee Stock Ownership Program (ESOP). As a result of the transaction, the ESOP assumes controlling interest in DTS, Wi-LAN relinquishes its DTS Board seats, and Wi-LAN will report a gain on sale of $27,319,000 in its consolidated financial results for the three months ended January 31, 2001. The cash portion of the gain on sale is $166,000.
"With this sale, we are focused purely on our core broadband wireless strategy," said Hatim Zaghloul, President, Chairman and CEO, Wi-LAN Inc. "We are excited about focusing all our energy on growing our core business to its full potential."
In January 2000, Wi-LAN acquired a controlling interest in DTS. Later in 2000 and 2001, Wi-LAN acquired additional ownership in DTS through various transactions. In its financial results for the nine months ended July 31, 2001, Wi-LAN wrote down the assets of DTS to estimated fair market value, and for the financial year ended October 31, 2001, DTS was recorded as discontinued operations. On December 31, 2001, the ESOP agreed to purchase all DTS equity instruments held by Wi-LAN. The final selling price of the approximately 10 million shares in DTS was subject to an independent valuation by February 28, 2002. Pursuant to the completion of the independent valuation and further negotiations between Wi-LAN and DTS, the purchase consideration agreed to was $166,000 cash and Wi-LAN will retain ownership of 250,000 DTS common shares.
The gain on sale of the DTS shares has been determined as follows (in thousands of Canadian dollars):
| Cash proceeds from ESOP | $ 166 | |
| Remaining investment in DTS | 39 | |
Reduction in consolidated
liabilities attributable to DTS | 30,329 | |
| Non-controlled interest in DTS | 1,825 | |
| 32,359 | |
| | |
Less: Reduction in consolidated
assets attributable to DTS | (5,040) | |
| Gain on sale | $ 27,319 | |
"The closing of the sale of DTS leaves Wi-LAN with a much stronger balance sheet," said Steve Bellamy, Chief Financial Officer, Wi-LAN. "This transaction enhances Wi-LAN's consolidated financial results today and will continue to do so going forward."
About Wi-LAN Inc.
Wi-LAN is a global innovator in the field of high-speed wireless data communications, specializing in high-speed Internet access, LAN/WAN extension and broadband wireless access. Wi-LAN is the Chair Company of the OFDM Forum (www.ofdm-forum.com). Wi-LAN believes its W-OFDM patent is necessary for the implementation of devices using the IEEE 802.11a or ETSI BRAN HiperLAN/2 standards. Wi-LAN's products have been sold in more than 50 countries on six continents. Wi-LAN's common shares trade on The Toronto Stock Exchange under the symbol "WIN." Detailed information on Wi-LAN can be found at www.wi-lan.com.