Enterasys Delays Aprisma Spin-Off Due To SEC Investigation

Enterasys Networks Aprisma Management Technologies

"It appears Aprisma will be included in the SEC inquiry, and we cannot assure you that the inquiry will not include some review of Enterasys or other affiliates," said Henry Fiallo, chairman and CEO of Portsmouth, N.H.-based Enterasys, in a conference call. "Accordingly, we have decided to delay the previously announced distribution of Aprisma shares to Enterasys shareholders."

The company expects Aprisma will continue to be accounted for as a discontinued operation within Enterasys, Fiallo said.

Executives from Aprisma were not immediately available for comment.

Shares of Aprisma were scheduled to begin trading on the Nasdaq under the symbol "APRM" on Feb. 13, following the record date for the distribution, which was set for Feb. 5.

Network management vendor Aprisma has been operating as an independent unit of Enterasys since August, when Enterasys was spun out from Cabletron Systems.

On Friday, Enterasys disclosed that it received notice after the close of business on Jan. 31 that the SEC issued an order of investigation relating to Enterasys and certain affiliated companies.

Also Friday, in an issue the company said was unrelated to the SEC investigation, Enterasys said it is delaying the release of its fourth-quarter earnings results pending a review of the terms of a $4 million sales contract in Asia.

Shares of Enterasys lost more than half their value Monday morning, trading down $5.80 to $5.