Proxim Buys Agere WLAN Biz

SUNNYVALE, Calif. and ALLENTOWN, Pa. -- Proxim Corporation (Nasdaq: PROX), a leading manufacturer of wireless networking equipment, and Agere Systems (NYSE: AGR.A, AGR.B), the world leader in communications components, today announced that Proxim has agreed to acquire the 802.11 wireless local area network (LAN) equipment business of Agere Systems, including its ORiNOCO product line, for $65 million in cash. With the addition of ORiNOCO, Proxim will be the premier wireless equipment company with leadership positions in 802.11 enterprise LAN, public wireless access, distributed broadband and carrier-grade wireless backhaul systems markets. Under the agreement, Proxim will acquire assets primarily used by Agere in its wireless LAN equipment business, including a broad offering of wireless LAN products used in homes, small offices, enterprises, service providers and outdoor environments. Agere will retain its 802.11/Wi-Fi chips, modules, and cards business, representing the majority of Agere's total Wi-Fi business. The sale will allow Agere to sharpen its focus on providing Wi-Fi component solutions for the emerging wireless computing, networking and entertainment markets. "This transaction provides the scale, scope and depth that will allow us to continue our consolidation of the wireless infrastructure business, and to fulfill our vision of integrated wireless connectivity from the core network to devices in a home, office or public space," said Jonathan Zakin, Proxim Corporation Chairman and Chief Executive Officer. "Upon closing of this transaction, we will provide investors with the broadest wireless pure play in the industry." Agere and Proxim have also agreed to enter into a three-year strategic supply agreement under which Agere will provide chips, modules and cards to Proxim, a license agreement for Agere technology used in the ORiNOCO business and a broad patent cross-license agreement for their respective patent portfolios including settlement of the pending patent-related litigation between the two companies. Agere's new strategic supply agreement with Proxim represents a new engagement with a leading wireless LAN equipment provider. Warburg Pincus and Broadview Capital Partners have agreed to collectively invest $75 million in Proxim to finance the acquisition. "We are excited about Proxim's strategy to build the business and the impact the ORiNOCO acquisition will have upon accelerating the company's roadmap," said Larry Bettino, a Warburg Pincus Managing Director. "We support the vision of the Proxim management team and are firm believers in the compelling prospects of the wireless equipment market." Proxim Corp. Agere Systems