ECI Telecom to Sell InnoWave 588878

ECI Telecom agrees to sell its wholly owned subsidiary InnoWave ECI Wireless Systems to Alvarion Ltd. for approximately $20M

February 19, 2003

2 Min Read

PETAH TIKVA, Israel -- ECI Telecom (Nasdaq: ECIL - News) announced today that it has signed a definitive agreement to sell the business of its wholly owned subsidiary, InnoWave ECI Wireless Systems Ltd., to Alvarion Ltd. (NASDAQ: ALVR - News). The value of the transaction, structured as a purchase of assets and liabilities, is approximately $20 million, consisting of a cash consideration paid by Alvarion and the cash balances of InnoWave at the date of closing to be withdrawn by ECI. In addition, Alvarion will grant warrants to purchase 200,000 of Alvarion's shares over a period of 5 years at an exercise price of $3 per share. The terms of the agreement are consistent with the provisions ECI reflected in its third quarter 2002 results and will therefore have no further material impact on ECI's financial statements. The receivable associated with the sale of fixed wireless equipment to GVT, Brazil (Global Village Telecom), will remain with ECI. With the closing of the agreement, a majority of InnoWave's employees will join Alvarion. The agreement is subject to certain closing conditions and is expected to close by the end of the first quarter of 2003. Commenting, Doron Inbar, President and CEO, ECI Telecom, said: "InnoWave has been recognized worldwide as a leading provider of fixed wireless access solutions. Given the consolidation currently occurring in this market, we believe the combination of InnoWave and Alvarion will create a particularly strong company, leveraging Alvarion's broadband wireless leadership and InnoWave's well-established global customer base and leadership in the wideband wireless voice and data segment. The transaction will enable Innowave`s existing and potential customers to benefit from a broader portfolio of comprehensive fixed wireless access solutions. ECI will continue to focus its resources on its broadband access, core optical transport and bandwidth management businesses. We thank InnoWave's employees for their important contribution to ECI and wish them success in their new environment". ECI Telecom Ltd.Alvarion Ltd.

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