Airvana Going Private for $530MAirvana Going Private for $530M

A group of private equity firms is buying Airvana for $530M

Dan Jones, Mobile Editor

December 18, 2009

2 Min Read
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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

About the Author

Dan Jones

Mobile Editor

Dan is to hats what Will.I.Am is to ridiculous eyewear. Fedora, trilby, tam-o-shanter -- all have graced the Jones pate during his career as the go-to purveyor of mobile essentials.

But hey, Dan is so much more than 4G maps and state-of-the-art headgear. Before joining the Light Reading team in 2002 he was an award-winning cult hit on Broadway (with four 'Toni' awards, two 'Emma' gongs and a 'Brian' to his name) with his one-man show, "Dan Sings the Show Tunes."

His perfectly crafted blogs, falling under the "Jonestown" banner, have been compared to the works of Chekhov. But only by Dan.

He lives in Brooklyn with cats.

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