MANHASSET, N.Y. Wireless telephony company SpectraLink Corp. has entered into a definitive agreement to acquire Kirk Telecom a Denmark-based provider of on-site, wireless communications products.
Under the agreement, SpectraLink (Boulder, Colo.) will pay $61.3 million in cash to purchase all of Kirk’s stock from its stockholders. Under the transaction, expected to close Jan. 3, 2006, Kirk will become a SpectraLink company while continuing to do business under the Kirk name.
SpectraLink obtained combined debt financing of $40 million in the form of a three-year term loan and revolving credit line. The company will use a combination of debt and up to $30 million of its own cash to acquire all of the outstanding shares of Kirk. Management believes that this acquisition will be accretive to earnings in its first year.
The acquisition is expected to increase SpectraLink's international reach by augmenting its distribution channels and geographical market penetration. The merger expands SpectraLink’s product portfolio to incorporate all major enterprise wireless voice technologies.
In its last fiscal year ended April, 30, 2005, Kirk had revenues of $35.9 million and net income of $2.7 million. KIRK scantel, a division that offers consumer-grade telephones in Scandinavia, will remain a wholly-owned subsidiary.