MAXxess management team pursues a company buyout option

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Wednesday, October 1, 2003

ANAHEIM, Calif. - Two years after selling off its CCTV business, Odetics Inc. is getting out of the security business altogether, with plans to sell its access control company MAXxess Inc. in a management-led buyout.

The deal is expected to close sometime this fall, but is subject to negotiations and the completion of a final purchase agreement between Odetics and the interested buyers.

The buyout is being led by the senior management team at MAXxess, which includes Wes Appleby, president; Brian Mallabon, vice president of engineering; and Nancy Islas, product support manager at MAXxess. Additional investors are also part of the buyout plan.

“We look at this as a tremendous opportunity,” said Appleby, who has been part of MAXxess for six years.

For Odetics, the sale will enable the company to focus on its Iteris business. That company designs and integrates traffic management and travel information systems to provide real time traffic information for motorists.

MAXxess, on the other hand, is expected to enable management to better focus on the company. “It’s really going to allow us as a group to focus on our core business,” said Appleby.

Odetics’ decision to sell MAXxess comes after a series of sales two years ago that shed the company of its CCTV business. The first transaction happened in early 2001 when it sold its PTZ dome camera line to Silent Witness. Six months later, after splitting Gyyr into two divisions, Gyyr Electronic Access Control and Gyyr CCTV Products, it sold its CCTVproduct division to Silent Witness, a deal that netted $8.9 million for Odetics.

Gyyr EAC was then renamed MAXxess, drawing upon the company’s Axxess access control product to create the new name and to move away from the Gyyr name, which many people associated with video and digital storage products.

The two deals to Silent Witness were expected to help financially troubled Odetics. At that time, the company planned to use the funds to retire short-term debt and beef up cash to meet working capital needs.

Last year, the company sold its headquarters to an investment management firm, a deal that included a 10-year leaseback provision for the company and helped the company pay off debt.