Data communications vendor Westel Wireless has signed a joint marketing agreement with its former US distributor King Communications USA that will enable its digital wireless base station gear to be offered to the US government.
King Communications had a US Department of the Interior contract which meant it could sell Westel Wireless products to US government agencies without going to tender, parent company Westel Group said in a statement to the ASX last week.
“This contract ... establishes a fast route to market for Westel's soon-to-be-released 100-Watt VHS base station,” the company said.
Westel said it had also secured an option to buy out King Communications USA, including its mobile digital data business, based on King's performance in the next two years.
“The exact terms of this option remain confidential on commercial grounds, but it is based on Westel paying a private company multiple for-average earnings over the period, before interest and taxation,” Westel said.
Meanwhile, King Communications had assigned a senior marketing executive to promote Westel Wireless products exclusively. Westel-dedicated resources are expected to increase if sales grow, the company said.
Westel Wireless would fund stock purchases to help King finance its growth. The US Federal Department of Homeland Security has freed up funding for communications equipment purchases by emergency response teams there, the company said.
Also, Westel and King would co-operate on a multi-site voice and data system showcasing a Westel base station-King mobile digital data terminal interface, Westel said.
Westel Group had not returned calls for further detail on the deal at press-time.