LINCOLNSHIRE, Ill.—Motient Corp. said it is selling its legacy wireless data business, including its narrowband terrestrial DataTac wireless data network and its IMotient Solutions platform, to Geologic Solutions Inc.
Geologic is a subsidiary of Logo Acquisition Corp. Logo agreed to assume most of the post-closing liabilities related to Motient’s business. Under the Agreement, Logo will pay Motient the sum of $1 in cash.
Motient said the transaction will save it $15 million to $18 million in total future operating costs.
“We believe that this transaction is another step in the right direction for our shareholders,” said Christopher Downie, chief operating officer of Motient. “While we have made material strides in reducing the cost structure associated with our legacy DataTac network and are achieving positive growth in our iMotient product, these businesses are no longer a core asset to the company.
“Over the past few years, we have been refocusing our business strategy and corporate resources toward our interest in the satellite communications companies,” said Downie. “By effectively transferring our legacy assets out of the company, we believe that Motient will be better positioned to focus solely on assisting TerreStar and MSV (to) execute on their respective strategic plans.”
Motient said TerreStar does not generate any revenue now, and likely won’t do so until 2008.
The announcement brings to a close Motient’s long involvement in the wireless data business.
Almost 30 years ago, Motorola Inc. teamed with IBM Corp. to build a network that would allow IBM’s service technicians to stay in touch while they were repairing copiers and mainframes. It became a network called Ardis. IBM eventually sold its share of the network to Motorola. Motorola hung on to the business until early in 1998, when it sold Ardis for $100 million to American Mobile Satellite Corp. As business conditions changed, AMSC decided to give itself a new identity, one that would instill ideas of motion, intelligence and information—Motient.
However, Motient soon began bleeding customers as the nation’s wireless carriers began upgrading their data networks to support higher speeds. Last year, Motient announced it shut down the rural sections of its network, reducing its coverage from 200 million people to 137 million.
As of March 2006, Motient counted 72,583 devices on its network, which it calls DataTac. During the quarter ended March 2006, Motient earned $2 million in revenues from its network, down from $5 million in the year-ago quarter.
