Mosaid CEO John LindgrenTory Zimmerman/The Globe and Mail
Mosaid Technologies Inc. which has agreed to be bought by a U.S. private equity firm, says it lost $4.9-million in its latest quarter, due to higher litigation costs.
The Ottawa-based technology patent firm said Wednesday the loss amounted to 40 cents per share in what was the company's second quarter. That compared with a profit of $6.3-million, or 53 cents per share, a year ago.
Revenue was relatively flat at $20.2-million, compared with $20-million a year ago.
Mosaid paid $7.2-million in legal fees in the quarter compared with $2.3-million a year ago.
Ottawa-based Mosaid, which makes its money by licensing technology patents to other companies, often has to go to court to defend its patent rights.
Mosaid had cash and marketable securities of $115.9-million at the end of the quarter, compared to $122.9-million at the end of the first quarter of fiscal 2012.
Mosaid had been the subject of a takeover battle that ended with a deal to be bought by U.S. private equity firm Sterling Fund Management for $590-million. The friendly deal topped a hostile offer by rival Ottawa-based technology patent company Wi-LAN Inc.
During the quarter the company acquired some 2,000 wireless patents and applications originally filed by Nokia Corp.
"We expect the Nokia patents to drive revenue growth for Mosaid and believe the acquisition affirms our position as one of the world's premiere licensing organizations," said John Lindgren, Mosaid's president and chief executive officer.
"The transaction with Sterling resulted from an extensive review process of Mosaid's alternatives and, in the view of the special committee and the board, represents the best sale alternative available for shareholders."
It paid out $3-million to shareholders in dividends during the quarter, but has agreed to suspend those payments under its agreement with Sterling.
The company had 88 per cent more patents than it did at the end of the quarter of 2011.