A Novo to buy BSI, shows Q3 net loss
A Novo Broadband Inc. agreed to buy Broadband Services Inc.'s repair business for about $8 million, expecting the deal to generate $10 million in revenue by the end of FY 2002. The company also showed a third-quarter net loss of $613,542 on revenue of $3 million.
A Novo says it will pay $8 million in cash and assumed liabilities for BSI, resulting in $10 million in incremental broadband equipment service and repair revenue by Sept. 30, 2002.
The company expects to close the deal by Aug. 31, using cash on hand and bridge loans, pending completion of additional financing, it says.
The deal makes A Novo a vendor for digital repair services for Motorola's digital cable set-top boxes, with authorized service centers in Delaware and Florida.
Revenue for its third quarter rose 18.7 percent, from $2.5 million a year ago, to $3 million. Profit reached $1.1 million, up from $825,770 a year ago. The company's net loss was $613,542, or 13 cents a share, compared with $10,935, or 1 cent a share, a year ago. A Novo cites slower sales from reduced spending by cable operators, delays in implementing its digital processing and costs of expansion for the loss.