Chicago (IL) – InFocus, manufacturer of digital projectors, has been sold to Image Holdings Corporation (IHC), an Oregon company that was founded by John Hui, co-founder of eMachines. InFocus was hit hard by the current recession and was believed to run out of cash by the end of June.
IHC paid $0.95 per share for InFocus, which represents a 36% premium over the Friday closing price and a 90% premium over the last 30 day average closing price of $0.50. In early Monday trading, InFocus stock jumped by about 28% to $0.89. The company had a market cap of about $26.5 million on Friday of last week. The offer will be subject to the tender of a minimum of 65% of InFocus outstanding shares and other customary conditions, including the absence of any material adverse effect on the InFocus business.
InFocus has struggled financially over the past year and its cash reserves were down to about $33 million by the end of last year. The company lost about $13.1 million in the fourth quarter of 2008 on revenues of $51.4 million. Analysts believed that InFocus had no opportunity to return into the black by itself and would have run out of money by the end of June.
“After an extensive review of strategic alternatives with InFocus management and our financial advisors, we determined this all cash sale of InFocus to IHC provides the best value for InFocus shareholders,” said Michael Hallman, the lead independent member of the InFocus board of directors.
When part of IHC, the InFocus management believes that it can reduce overall cost and depart from the 3-month goal schedule and focus “on longer-term priorities.”