Xircom Discussing Buyout of Wireless Division

Xircom Inc. is holding talks for a management-led buyout of its Netwave Wireless unit, the company says.

Netwave makes technology that links laptop personal computers to networks through radio waves instead of direct, wire-based connections. The unit accounted for about $500,000 of Xircom’s revenue of $45 million in recent quarters, said Steve DeGenaro, vice president of finance.

However, Netwave’s operating costs reduced earnings by 2 to 3 cents a share, DeGenaro said.

Xircom, a Thousand Oaks-based computer equipment maker, has been looking for a partner for the unit for the past four or five months, DeGenaro said. He said the move would allow the company to focus on its core PC Card business.

Xircom said it would retain about a 20% stake in Netwave under the proposed terms of the agreement.

Mountain View-based Netwave would be operated by Xircom chief financial officer Jerry Ulrich, who would step down from his post at Xircom. Xircom chairman and chief executive Dirk Gates would be a member of the board of directors of the separate company under a plan approved by Xircom’s board of directors.

The transaction isn’t expected to close until Xircom’s fiscal fourth quarter, which ends Sept. 30. If a charge comes from the transaction, the company would be required to take it in the third quarter, DeGenaro said.