Airvana Going Private for $530M

Airvana Inc. is going private again with a buyout by four private equity companies for $530 million.

The company announced a deal this morning whereby 72 Mobile Holdings LLC -- a new company held by S.A.C. Private Capital Group, LLC, GSO Capital Partners LP, Sankaty Advisors LLC, and ZelnickMedia -- will buy out the company. Some Airvana executives, including CEO Randy Battat, and founders Vedat Eyuboglu and Sanjeev Verma, will exchange a portion of their shares for an equity interest in 72 Mobile Holdings. (See Airvana Agrees $530M Sale.)

Merle Gilmore will be the new company's chairman. Gilmore is the former head of Motorola Inc. (NYSE: MOT)'s Communications Enterprise; he resigned in 2000. More recently Gilmore has been a director of Revenew Systems and a partner at private equity firm Ripplewood Holdings.

The deal gives Airvana shareholders $7.65 a share. The acquisition is expected to be completed in the first quarter of next year.

The company says it will continue working on femtocells and CDMA EV-DO infrastructure software. "You'll get the same great products from the same great team," says CEO Battat.

The company had reported a wider loss of $16.9 million for the third quarter of 2009 due to unpaid monies from major customer Nortel Networks Ltd. Airvana received a payment of $39.6 million on November 13, following the Ericsson AB (Nasdaq: ERIC) buyout of Nortel's wireless unit. (See Airvana Gets $40M Nortel Payoff.)

Airvana's shares were up over 20 percent, or $1.21, at $7.51 each, in midday trading Friday.

But the deal is already being scrutinized by securities and shareholder litigation firm Levi & Korsinsky LLP, which says:

    The investigation concerns whether the Airvana Board of Directors breached their fiduciary duties to Airvana shareholders given that the offer price is only a small premium over the $7.06 price the Company's shares traded at as recently as September 28, 2009 and at least one analyst set a price target for Airvana stock at $8.50 per share.

— Dan Jones, Site Editor, Unstrung

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