US Robotics is back, at least in name.
3Com expects to announce on Wednesday that it has completed its agreement with Accton Technology and NatSteel Electronics to create a new modem company that will be called US Robotics -- the same name of the communications equipment company 3Com bought in mid-1997.
"What we're forming here is a company that has a very strong brand presence and market leadership in analog modems," said Jef Graham, senior vice president of commercial and consumer networks at 3Com. "They have the [retail] shelf space, and a very strong channel presence."
Obviously, it's not the same US Robotics that 3Com bought three years ago. That company, in addition to analog modems, also sold access equipment to Internet service providers as well as the original Palm Pilot handheld, which was to become one of 3Com's hottest properties. Palm is now in the process of being spun off from 3Com as a publicly traded company.
3Com will transfer its analog-only modem product lines to US Robotics, which is expected to be fully operational by September 2. 3Com will retain its combination modem-network cards and its broadband access equipment lines of business.
About 200 current 3Com employees have been transferred to the new company. 3Com will announce US Robotics' chief financial officer within the next few weeks, and a search is underway for a chief executive officer, Graham said.
Separately, 3Com will sell the manufacturing plant in Mount Prospect, Illinois, which was making the analog modems to NatSteel; that deal has not closed yet. About 1,200 3Com employees will be transferred to NatSteel when that transaction is closed.
3Com will retain a minority stake of less than 20 percent in the privately held US Robotics; other company stakeholders include Accton, NatSteel, and US Robotics employees in the form of stock options. Graham said US Robotics expects to file an initial public offering at some point in the future.
As an independent company, US Robotics is expected to expand beyond analog modems into multiple Internet access products, including broadband modems. "We expect [US Robotics] will compete against us in the future," Graham said.
3Com does not break out revenue for its modem business, but Graham said the US Robotics business is worth "many hundreds of millions of dollars" per year.
Graham added that 3Com has retained all the patents and intellectual property related to analog modems, and that 3Com has granted a royalty-free license in perpetuity to the new US Robotics for analog modem technologies.
