Nextel acquires Chadmoore
One of the large analog specialized mobile radio (SMR) system operators, Chadmoore Wireless Group, has agreed to sell most of its assets to Nextel Communications. The agreement was announced on Aug. 21.
From its Las Vegas headquarters Chadmoore operates a U.S. network of two-way radio SMR systems. Among the assets are an estimated 4,800 800MHz channels.
Nextel began as a consolidator of analog SMR systems, which it later converted into digital two-way radio systems with a cellular base station architecture. It de-emphasized dispatch services and focused on selling handsets to business users for telephone interconnect that perfectly imitates cellular and PCS telephone service, with a twist – users can still use a form of dispatch service to call unit-to-unit (sometimes called “direct connect” or “executive intercom”). Also, Nextel handsets can receive paging messages.
Pending approval by the FCC and Chadmoore shareholders, the shareholders will receive Nextel shares anticipated to be valued at $113.5 million, or about $1.40 per Chadmoore share, subject to further adjustments at closing as defined in the agreement. Chadmoore shares were trading at 90 cents on Aug. 31.
Another $46.5 million in Nextel shares will be issued to Chadmoore and converted to pay liabilities and transaction expenses. Among other risks, Nextel will be assuming a possible FCC cancellation of Chadmoore licenses with a book value of $6.2 million. The possible FCC action stems from a years-long march toward resolution of the status of construction deadlines that may apply to licenses that Chadmoore acquired. The affected licenses are connected with applications originally prepared by dubious SMR application filing services for entities participating in the old lottery system of awarding licenses.
Although Chadmoore’s systems are predominantly analog, in years past it announced purchases of the same type of digital equipment used by Nextel. On the other hand, part of Chadmoore’s business strategy has been to capture analog customers displaced from systems purchased by Nextel and then converted from analog to digital. Moreover, Chadmoore typically bills customers a flat monthly rate per mobile unit for dispatch service with an airtime surcharge for wireless telephone calls. Nextel bills by airtime used per handset or mobile unit. The difference can be substantial for digital dispatch service because airtime charges accrue for multiple units in a one-to-many call.
Additionally, Chadmoore was a beta-test customer for digital technology made by ComSpace, Coppell, TX. Nextel has not indicated interest in ComSpace’s digital-channel, multicarrier architecture (DCMA) products, so the possible sale of additional DCMA products for use on the Chadmoore systems being acquired by Nextel seems doubtful.
AVeL-Tech, a Canadian company headquarterd in Laval, Quebec, has inked contracts with GTE and Motorola for separate automatic vehicle location (AVL) installations.
The GTE contract covers installation of an AVeL-Net system for tracking 173 police and fire vehicles in Fort Lauderdale, FL. The system will run on a Motorola Datatac network and will coexist with Intergraph’s computer-aided dispatch.
The Motorola contract covers the installation of an Avel-CAD computer-aided dispatch system for the Trinidad and Tobago police and fire Departments. The system will integrate Motorola’s Centralink 9-1-1 system with AVeL-Tech’s AVeL-Net AVL system and Radiogate message switch.
