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Alvarion Snaps Up InterWave

Light Reading
LR Mobile News Analysis
Light Reading
7/28/2004

Remember when late July used to be a news graveyard? Not any more. Hot on the heels of this week's other significant financial news, WiMax hopeful Alvarion Ltd. (Nasdaq: ALVR) has announced it will buy compact base-station vendor InterWave Communications International Ltd. (Nasdaq: IWAV) in a cash deal worth $56 million (see Alvarion Buys InterWave).

This week has already seen another major acquisition and some beefy VC top-ups (see Symbol Spends $230M on RFID, Airespace Reveals VC Funding, and Aruba Wraps $42M Financing).

Alvarion's proposed deal, which needs the approval of InterWave's stockholders, will see it pay $5.75 for each InterWave share. The latter's stock closed up 5 cents yesterday at $5.29, valuing the company at $47.7 million.

Rumors of the move appeared to have hit the streets early yesterday as Alvarion's share price rocketed Tuesday by $1.45, more than 14 percent, to close at $11.62. However, it has dropped by 52 cents, more than 4 percent, to $11.10 in pre-market trading this morning.

Alvarion had assets of $142 million at the end of 2003, including $52 million in cash. In May it announced record quarterly revenues of $44.7 million for the first three months of this year and a net profit (see Alvarion Ups Revenues). It expects to announce revenues of $47 million to $49 million, and further profits, for its second quarter on August 4.

Alvarion is one of a gang of vendors hoping to ride the anticipated WiMax wave, and it's currently the only profitable vendor in that niche, according to a recent Unstrung Insider report (see Insider: WiMax CrackUp Coming). It recently struck a deal with Siemens AG (NYSE: SI; Frankfurt: SIE) and was also named as a star performer by sector analysts (see Siemens Sticks to WiMax and Analyst Boosts Alvarion ).

In its official statement about the InterWave move, Alvarion CEO Zvi Slonimsky says the acquisition "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." He adds: "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."

That technical expertise includes both GSM and CDMA products (see Qualcomm, InterWave Do CDMA, InterWave Acquires GBase, and Army Deploys InterWave GSM).

Both companies are known for providing cost-effective systems that are quick to deploy, and have notched up a string of successes in developing and recently deregulated markets (see InterWave Wins in Nigeria, InterWave Wins Iraq Deal, Alvarion Expands in Latin America, and Alavrion Wins in India).

Late last year InterWave was the subject of some acquisition speculation when Nokia Corp. (NYSE: NOK) made some noises about a move into the CDMA arena (see Nokia's CDMA Shopping List).

— Ray Le Maistre, International News Editor, Light Reading

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