Canada’s Northern Telecom to Buy Micom

Northern Telecom Ltd. said Monday that it plans to buy Micom Communications Corp. for $153 million, including the assumption of debt, to boost its multimedia networking business.

Northern Telecom, which has accumulated profit from its high-speed phone lines and call-routing technology, said it will pay $12 a share for each of Simi Valley-based Micom’s 11.45 million shares.

Micom’s shares declined $2.25 to close at $11.75 on Nasdaq. They hit a 52-week high of $14.375 last week.

Shares of Northern Telecom, based in Mississauga, Ontario, closed up $1.625 at $52.375 on the New York Stock Exchange.

“Certain large shareholders appeared to want to get out” of Micom, said Michael Hankinson, analyst at Newby & Co.

Northern Telecom said Odyssey Partners and other Micom shareholders agreed to tender 5.15 million shares, or 44% of Micom’s total. Odyssey officials could not immediately be reached for comment.

Hankinson said he was disappointed the merger is coming at a time when the company’s products were starting to “come into the limelight.” He said analysts estimated that the firm’s sales would increase more than 20% in 1997.

The purchase price for the network software company includes $4 million of debt and more than 1 million employee-owned stock options, said Robert O’Brien, a Northern Telecom spokesman. The deal, which has been recommended by Micom’s board, is expected to close by the end of June, O’Brien said.

Jean Monty, Northern Telecom’s president and chief executive, said Micom’s technology--especially its expertise in sending data over high-speed phone lines--will complement Northern Telecom’s products.

Northern Telecom, 52%-owned by BCE Inc., makes high-speed phone lines and switching networks, which phone companies use to route calls.

Micom has struggled during the last two years with inventory problems.

Northern Telecom recently secured two contracts worth more than $1 billion from Sprint Corp. and WorldCom Inc.