Wireless Applications

Digi Acquires Wireless Leader MaxStream

July 28, 2006

MaxStream's technologies and products significantly expand Digi's wireless offering, covering both short- and medium-range applications, using embedded modules and packaged solutions.


MINNETONKA, MN /BUSINESS WIRE/ -- Digi International Inc. announced the acquisition of MaxStream Inc., a fast-growing, privately held corporation and a leader in the wireless device networking market. The acquisition is a merger transaction for $38.5 million of cash and stock, with $19.25 million paid in cash and $19.25 million in Digi stock.

Based in Lindon, UT, and employing 49 people, MaxStream generated $10.4 million in revenue and $1.3 million in net income, or 12.7% of revenue, in the year ending December 31, 2005.

MaxStream supplies device manufacturers and integrators with reliable wireless modules and box products that meet the unique needs of industry and commerce. The products are easy-to-use and allow customers to wirelessly monitor and control electronic devices. To meet market needs, MaxStream provides a menu of distance and speed options, ranging from 100 feet to 40 miles, and a few Kbps to 1.5 Mbps. Some typical applications include automated utility meter reading, oil and gas monitoring, remote control and monitoring of commercial heating and air conditioning systems, vehicle information access for fleet management, industrial controls, wireless sensors, and electronic signals.

"This is really an exciting combination—the strategic fit between the two companies is remarkable," said Joe Dunsmore, chairman, president and CEO of Digi. "Our product lines are entirely complementary. We're both focused on the commercial-grade device networking market and our core strategies of providing turnkey box products and embedded modules are the same."

"What a great opportunity this is for MaxStream to join with a company that has such a great reputation in the industry," said Brad Walters, president and CEO of MaxStream. "Culturally, the two companies are very compatible, and we're really looking forward to jointly addressing the rapidly growing wireless market."

Broad Wireless Offering
Digi is focused on connecting commercial and industrial devices via both embedded and boxed/packaged products. With a long history of wired connectivity solutions—serial, USB, and Ethernet—Digi has moved aggressively into wireless in the past four years with products and capabilities in both the WiFi (802.11) and cellular arenas. As the world continues to migrate from wired to wireless, MaxStream wireless technologies and products significantly expand Digi's wireless offering - covering both short and medium range using embedded modules and boxed/packaged solutions. Additionally MaxStream has quickly become a leader in the ZigBee/802.15.4 market targeted at low power, low bandwidth solutions for applications such as wireless sensor networks.

"The combination of Digi and MaxStream provides the capability to provide their customers end-to-end wireless solutions," said Glenn Allemdinger, founder and president of Harbor Research Inc. "Other companies are limited in what they can provide either the local- or the wide-area network wireless solution. Digi had the WAN with their cellular routers and part of the LAN with their embedded WiFi solutions. Adding MaxStream's proprietary and Zigbee-based wireless technologies completes their portfolio. Digi has done a wonderful job of transforming itself from its legacy products into a provider of commercial-grade wireless solutions. What impresses me is that they have done this transformation while maintaining strong financial performance. We consider Digi "best-in-class" when it comes to corporate development."

About Digi International
Digi International, based in Minneapolis, makes device networking easy by developing products and technologies that are cost effective and easy to use. Digi markets its products through a global network of distributors and resellers, systems integrators, and OEMs. For more information, visit Digi's Web site, or call 877-912-3444 (U.S.) or 952-912-3444 (International).

About MaxStream
MaxStream is a leading worldwide developer of wireless modem networking for electronic devices. MaxStream provides wireless modem modules, stand-alone radio modems, RF design services, and supporting software. Products and services by MaxStream include designing, manufacturing, and supporting wireless communications for embedded systems and box products. For more information regarding MaxStream's products and services, visit the company's Web site, info@MaxStream.net, or call (866) 765-9885.

Digi, Digi International, and the Digi logo are trademarks or registered trademarks of Digi International Inc. in the U.S. and other countries. MaxStream is a trademark of MaxStream Inc.


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