Hayes to merge with remote access firm
The modem and remote access communications company plans to go public through a reverse acquisition with Access Beyond, a remote access vendor in Gaithersburg, Md., according to sources familiar with the decision. An announcement is expected to hit the wires Wednesday morning.
The new company will be renamed Hayes Communications.
Reached by telephone, Hayes' CEO Joe Formichelli declined comment.
However, sources said Formichelli will be chief executive of the new company while Hayes' founder Dennis Hayes will be its chairman.
Ron Howard, the chief executive of Access Beyond, will serve as Hayes' vice chairman and executive vice president.
It is not unusual for privately held firms to go public by entering into so-called reverse mergers which are quick and inexpensive affairs. Following completion of the deal, representatives of the acquired firm are usually given control of the board, which promptly renames the company, subject to shareholder approval.
That would be an ideal way for Hayes, which lost $2.5 million in the second quarter, to go public. Without a string of profitable quarters behind it, the company would have likely found it difficult to manage a successful initial public offering.
"I'd have given them two chances - slim and none," said one industry analyst who asked to remain unidentified. "This is a smart move. It opens them up to the markets and they do it with a minimum of fuss and muss."
The easier access to capital will come in handy if Hayes, which in the recent past has acquired Cardinal Technologies and Practical Peripherals, continues on its acquisition strategy.
In the second quarter, Hayes' revenues declined to $55.7 million from $68.6 million in the year ago quarter when it loss $288,000.