Proxim Back in the WLAN Game

Proxim, Inc. on Monday announced it has acquired privately held Card Access, Inc., of American Fork, Utah, a developer of IEEE 802.11a wireless networking products.

Under the terms of the transaction, Proxim purchased Card Access for 400,000 shares of Proxim common stock , which was valued at approximately $4 million valued at Friday’s closing stock price. Proxim will also assumed $500,000 of debt and has also outlined performance incentives that could increase the total price of the transaction to $6 million.

Despite the summer doldrums, the latest research continues to project the wireless LAN industry as an explosive growth opportunity. Allied Business Intelligence projects that WLAN equipment revenue will grow from $969 million in 2000 to $4.5 billion in 2006. Hardware based on the higher data rate of 802.11a is expected to capture 50 percent of the annual volume by 2005.

The acquisition will help complement Proxim’s mobile broadband networking product lines and is designed to help offset some of the negative sentiment that has hovered over the Sunnyvale, Calif.-based company like a storm cloud since last spring, when Intel disclosed it was backing away from supporting HomeRF.

While HomeRF — a wireless standard that has long been championed by Proxim — has quickly become an outdated technology, Proxim still maintains development of its next-generation, HomeRF 2.0. But now, the company has also greatly expanded its 802.11 pipeline. In its press release, the company said the acquisition will “expand its solution set for the enterprise wireless networking market and accelerate the development of its next-generation, high-speed wireless networking solutions.”

Proxim said it will integrate Card Access employees into its development, sales and marketing organizations.