Psion buys Canadian mobile net vendor

Europe's largest maker of palmtop computers, Psion, has continued its expansion into mobile internet with the acquisition of Teklogix International, a Canadian software and wireless communications equipment maker.

Psion revealed plans yesterday to launch a £9.5m mobile services joint venture that includes the £1.1m purchase of Wap portal Fonedata.

Today's proposed £242m deal, of which £100m is in cash and the balance in Psion shares based on a price of 650p, means that Teklogix shareholders will receive 2.393 Psion shares and cash valuing each of their shares at C$35 (£15.60).

This represents a hefty 41 per cent premium on yesterday's closing price of C$24.9 and a sixth higher than Teklogix's share price peak over the last 12 months of C$30.

In the financial year ending 31 March 2000, Teklogix made a pre-tax profit of C$33m (£14m) on revenue of C$209m (£93m). Psion shares had fallen 23p on the day, a shade under four per cent, to 642p at 2pm BST.

Psion is looking to strengthen its position in mobile access to the internet at a time when governments across Europe are looking to auction off high-capacity wireless licences. This deal is described as part of a new series of acquisitions, investments, technology agreements and original equipment manufacturer relationships.

"Psion views the industrial wireless communications market as tremendously important to its strategy," said Psion chairman David potter. "This acquisition provides Psion with core technology in wireless local area networking which enhances Psion's position in the new mobile internet world."

The deal requires approval from both sets of shareholders, regulatory bodies and the Canadian courts. Teklogix's chairman and chief executive, who own a combined 27 per cent of the firm's stock, have backed the merger.