Spectrum Digital Corp. of Herndon announced yesterday it will be acquired by Micom Systems Inc., a California data communications equipment firm, for $25 million in cash and securities. Micom will also provide $3 million for operating expenses and working capital before the deal's scheduled completion Oct. 30.
Spectrum, formed in 1984 by three former MCI Communications Corp. employes, designs and manufactures digital multiplexors, a communications switching system.
Digital multiplexors allow up to 24 simultaneous uses of phone circuits. They can be used by long distance services such as AT&T, MCI and US Sprint to bypass local phone companies. They cost from $15,000 to $300,000, but, according to Spectrum president and CEO Joseph T. Pisula, the medium-to-large companies that use the systems can recoup the cost in saved access fees.
Ray Thomas, chief financial officer of Micom, said multiplexor sales have the "highest growth rate in the data communications marketplace." He said Micom bought Spectrum as a cheap alternative to developing its own multiplexor technology.
Pisula said the company's 12.6 million shares of common stock will be converted to common stock in a ratio based on the average price of Micom shares in the weeks preceding the closing of the acquisition. Micom closed on the over-the-counter market yesterday at $12.75, down $1.50.
Spectrum shares, which have been trading for between 60 and 90 cents apiece, will be valued at $1 a share for the transaction. The deal guarantees an exchange based on a Micom price of between $13 and $17. Micom will pay $1.25 in cash for preferred shares.
Spectrum has spent about $20 million on development of its multiplexor, Pisula said, but only began marketing the product in February. The company reported operating losses of $7.5 million in 1986, with negligible revenue, and $2.4 million for the quarter ending March 31, on revenue of $693,000. Pisula said the figures for the quarter ending yesterday would be about the same, and anticipates the company will become profitable by the end of 1987.
The acquisition gives Spectrum access to Micom's marketing and sales networks. Micom had sales of $200 million last year.