NEW YORK—Ogo device vendor IXI Mobile Inc. said it is merging with Israel Technology Acquisition Corporation, the firms announced. IXI Mobile is expected to become a wholly owned subsidiary of ITAC when the deal closes, which is expected in the third quarter of this year.
IXI Mobile, headquartered in Redwood City, Calif., is privately held and has research and development facilities in Israel and Romania. The company sells the Ogo family of wireless devices that support instant messaging, e-mail and text messaging features, but no voice capabilities. Publicly traded ITAC, which is focused on acquisitions of Israel-based research and development firms, plans to change its name to IXI Mobile when the merger is consummated.
Israel Frieder, ITAC’s chairman and chief executive officer, said his company believes IXI Mobile’s products and services will thrive in the “underserved” mobile data market.
IXI said its equity holders would have an initial opportunity to acquire nearly eight million shares in ITAC common stock (the amount of outstanding ITAC common stock), and, upon attaining targets set in the deal, may acquire up to an additional 10 million shares in ITAC.
IXI Mobile launched in 2001 with its personal mobile gateway product, which the company proffered to wireless carriers and handset makers. The technology allows a user to buy a low-end, Bluetooth-capable mobile phone and then connect it to accessories like a camera or keyboard. The goal was to allow users to mix and match wireless accessories to suit their tastes.
IXI initially persuaded Sanyo North America Corp. and Samsung Electronics Co. Ltd. to embrace its idea. Samsung released a Bluetooth phone using the company’s technology, but it faired poorly. Sanyo developed several prototypes based on the company’s technology as well.
On failing to develop its licensing business model, IXI turned to selling the Ogo device directly to end users. IXI relied on a contract manufacturer to build the device.
IXI signed up Swisscom Mobile and Turkish ISP e-kolay.net to sell the Ogo. However, the firm took a major hit in late 2004 when Cingular Wireless L.L.C. acquired AT&T Wireless Services Inc., which had offered the Ogo, and decided to discontinue the device.
Earlier in 2005, IXI Mobile got a boost with a $4.3 million infusion of capital from Concord Ventures.
