Yesterday, wireless broadband company Alvarion (Nasdaq:ALVR; TASE:ALVR) and interWAVE Communications International (Nasdaq: IWAV) announced that they had entered into a definitive agreement for Alvarion to acquire interWAVE for $5.75 per share in an all-cash transaction valued at approximately $56 million. This is some 17% more than interWAVE's market cap of $47.72 million at the end of trading on Nasdaq yesterday.
interWAVE provides compact mobile GSM and CDMA network equipment and services, primarily aimed at low density markets in developing regions, as well as specialty vertical applications. Alvarion is a prominent member of the the WiMAX Forum.
Alvarion CEO Zvi Slonimsky said, "We are excited about this transaction for several reasons. First, it immediately provides an outstanding cost-effective fixed and mobile cellular solution to complement our eMGW residential voice and data solution serving regions of the world where wireline infrastructure is missing or inadequate. The addition of interWAVE expands our served market to include a rapidly growing segment of the mobile equipment market, broadens our customer base with additional top-tier operators, and leverages both our strong channel relationships and our global sales and customer support capabilities.
"Second, interWAVE's technical expertise in cellular systems design and extensive experience in providing complete mobile networks will accelerate the development of our next generation portable/mobile WiMAX offering. We are well-positioned to continue leading this last-mile revolution as WiMAX moves from fixed-only solutions to include both fixed and mobile capabilities."
interWAVE provides economical and distributed cellular networks that scale from a few thousand to 100,000 subscribers, enabling operators to minimize capital expenditures while accelerating revenue generation. The company's solutions are deployed in over 50 countries by more than 100 operators, mainly local and regional cellular operators. interWAVE's revenue for the 12-month period ended March 31, 2004 (unaudited) was $39.4 million.
The company is based in Mountain View, California, with engineering facilities in China and Ireland and additional sales and marketing facilities in other locations around the world.
interWAVE CEO Erwin Leichtle will join Alvarion's management team and will lead the mobile unit. Leichtle has more than 30 years experience in senior management positions, primarily at Ericsson, in various international markets and the United States.
The transaction will be effected through the amalgamation of interWAVE, and a wholly owned subsidiary of Alvarion. The transaction is subject to the approval of interWAVE's stockholders. The boards of directors of both companies have approved the transaction and interWAVE's board of directors has unanimously agreed to recommend that the company's stockholders vote in favor of approving the transaction.
The acquisition is expected to be completed by the end of the third quarter of 2004. Alvarion said that its was expected to have minimal impact on its third quarter earnings, excluding any acquisition-related charges, to be minimally dilutive in the fourth quarter and in the first quarter of 2005, and to be accretive beginning in the second quarter of 2005.
Shares of Alvarion closed at $11.62 on Nasdaq yesterday, up 14.26% on the day, giving the company a market cap of $598.79 million. In today's trading on the Tel Aviv Stock Exchange, Alvarion shares are up 3.64% at NIS 51.20, after opening on a positive arbitrage gap of 5.83%.
Published by Globes [online] - www.globes.co.il - on July 28, 2004