UTStarcom offloads handset unit

US infrastructure vendor UTStarcom said this week that it has agreed to offload its handset unit to equity firm AIG Investments for $240m.

UTStarcom said the spin off is consistent with its strategic focus announced late last year, which focuses on opportunities for its core IP products.

Under the deal, the newly named Personal Communications Devices business, which primarily distributes handsets and related accessories in North America, will continue to be led by its current management team who will be part owners of the company with AIG Vantage Capital and other investors.

The business unit will continue to design and provide devices to be sold in the Americas and will also sell devices directly to carriers in other areas of the world.

The move follows the recently announced divestiture of UTStarcom’s Mobile Solutions Business Unit to private equity firm OpenGate Capital.

In addition to the cash consideration, UTStarcom could also receive up to $50m based on a three year earn out provision.