Applied Innovation to be acquired

Applied Innovation Inc. said Friday it has agreed to be acquired by an Oregon company.

KEG Holdings Inc. has offered to pay $3.45 a share for Applied Innovation's outstanding stock, or roughly $52.7 million.

Based on Thursday's closing price of $3.20, shareholders will receive a 7.8 percent premium.

The boards of both companies have approved the proposed transaction. Applied Innovation Founder and a director Gerard B. Moersdorf, who has voting rights for about 37 percent of the Dublin company's shares, has also signed off on the deal.

Applied expects the sale to be completed by the end of its second quarter. Once the deal closes, Investcorp Technology Partners, an investor in KEG Holdings, will own a controlling interest in the combined company.

KEG Holdings is the parent of Hillsboro, Ore.-based high-speed network access equipment supplier Kentrox LLC.

"By bringing together the technical and service capabilities of Applied Innovation and Kentrox, our telecommunications customers will have expanded access to more advanced products," Applied Innovation President and CEO William H. Largent said in a release.

KEG Holdings President and CEO Jeff Estuesta said the company plans to retain Applied Innovation's workers after the deal. Applied Innovation representatives were unavailable immediately to say how many it employed.

The company provides hardware and software for equipment to monitor expansions and upgrades of telecommunication networks. It earned $3.35 million, or 21 cents a share, on revenue of $30.6 million in 2006.

Business First