Taiwan-based GigaMedia (GIGM) has announced the sale of its legacy ADSL Internet service provider business as part of its ongoing restructuring to focus on the high-margin, high-growth online entertainment sector.
Webs-TV Digital International Corporation, a Taiwan digital content provider purchased the ADSL business from GigaMedia in an all cash transaction with total value of US$17.9 million, including approximately $9.7 million for the ADSL ISP unit and approximately $8.2 million in fees for bandwidth, consulting and other support services payable over a defined transition period.
The sale has immediate effect. GigaMedia expects to record a significant one-time gain in the second quarter as a result of the transaction.
"The ADSL business was a non-core legacy of the old Giga," explained GigaMedia CEO Arthur Wang. "Today we reaffirm our commitment to build the leading Asian online entertainment company."
Webs-TV's purchase includes GigaMedia's approximate 62,000 ADSL subscribers, certain fixed assets and the rights to use Giga's ADSL brand for a limited period of time.
GigaMedia will provide bandwidth, consulting and other support services to Webs-TV to facilitate the transition of the operations of the ADSL ISP business.
