Penril to sell its modem unit, spin off rest of the company New firm to be called Access Beyond

June 18, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Penril DataComm Networks Inc. said yesterday that it will sell its biggest subsidiary to a California firm for $120 million, and then spin off the rest of the firm as a new company to be called Access Beyond.

The news caused the Gaithersburg company's stock to soar $3.625 to $13.625. The stock has risen from a 52-week low of $4.25 reached last June 30, even though Penril lost $7.7 million in fiscal 1995 and lost about $5.5 million in the first half of the year that ends in July.

Bay Networks Inc. of Santa Clara, Calif., said it had agreed to pay $10 a share to Penril shareholders for the firm's Penril Datability Networks subsidiary, which makes high-speed computer modems for corporate users. Existing Penril shareholders will get the $10 in Bay Networks stock and one share of the new company for each Penril share they own.

The deal is "a victory for the shareholders," said Ferris Baker Watts Inc. analyst Kevin Cory. "It's been such a long time, and I don't think anyone thought they would get $120 million for Penril Datability."

Scott & Stringfellow Inc. analyst David Beeghly said there are other reasons why the deal is a sharp move for Penril. He said the modem business is more mature than much of the information industry and thus has less explosive prospects, and that the deal focuses the company on Access Beyond.

The company said Access Beyond will be gunning for a piece of what will by 1999 be a $2 billion market for remote access connectivity, in which advanced modems, inter-networking terminal connectivity and other advances work together to connect corporate computer networks. Its first products reached the market in February.

Penril said it expects both the spin-off and sale transactions to be completed by early fall.

Pub Date: 6/18/96

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