Wireless Telecom Group to acquire outstanding stock in Willtek Communications for $26M

October 6, 2004

4 Min Read

PARSIPPANY, N.J. -- Wireless Telecom Group, Inc. (AMEX Symbol: WTT - News) announced today that on October 5, 2004 it entered into a definitive agreement to acquire all of the outstanding capital stock of privately held Willtek Communications GmbH ("Willtek") from the venture capital arm of the international investment group Investcorp and Willtek's Chief Executive Officer, Cyrille Damany, in exchange for $7.0 million in cash and 8,000,000 shares of WTT common stock (the "Purchase Price"), and the assumption of certain liabilities and obligations valued at $4.8 million. As a result of the proposed acquisition, Willtek will become a wholly-owned subsidiary of WTT. Based on the $2.40 closing price of a share of WTT common stock on October 4, 2004 on the American Stock Exchange, the value of the Purchase Price for the proposed acquisition is approximately $26.2 million. The purchase agreement does not provide for an adjustment in the number of shares of WTT common stock to be issued to the Willtek shareholders in the acquisition in the event of a fluctuation in the market value of WTT common stock. Giving effect to the proposed acquisition, the former shareholders of Willtek would own approximately 32% of the outstanding shares of WTT common stock.

The acquisition will bring together WTT, a U.S. market leader, and Willtek, a European market leader, in testing solutions for emerging wireless services and cellular networks. WTT believes that the acquisition will expand WTT's product portfolio into market segments with attractive growth prospects, strengthen its presence in Europe and Asia and increase WTT's revenue base. Willtek, headquartered in Ismaning, Germany, is a leading provider of solutions that enable manufacturers and operators of wireless communications devices to test mobile phones, air interface, and base stations of cellular networks. Willtek serves a base of more than 5,000 customers worldwide with state-of-the-art products including testing equipment for GSM, GPRS, CDMA and WCDMA phones and wireless devices, as well as handheld spectrum analyzers. With a dedicated team of approximately 150 people, Willtek has extensive research and development, sales and marketing organizations, as well as established distribution channels, which WTT believes will create substantial synergies and enable it to obtain increased revenues, market penetration and technological excellence.

At the closing of the acquisition, WTT will enter into a shareholders' agreement with Willtek's two shareholders, Investcorp Technology Ventures LP and Damany Holdings GmbH. The shareholders' agreement will provide that, upon the closing of the acquisition, WTT's board of directors will consist of seven directors, four of which will be existing directors of WTT and three of which will be designated by Investcorp and Damany. Savio Tung and Hazem Ben-Gacem from Investcorp plan to join WTT's board upon closing of the transaction. After the closing, at each annual meeting, Investcorp will be entitled to designate up to two individuals and Damany will be entitled to designate one individual for nomination by WTT's board for election as directors of WTT, so long as Investcorp's and Damany's respective ownership levels exceed certain predefined percentage thresholds of WTT's issued and outstanding common stock. The shareholders' agreement will also provide for the appointment of certain new officers of WTT designated by Investcorp and Damany, including Cyrille Damany, the current Chief Executive Officer of Willtek, as the new Chief Executive Officer of WTT. Moreover, the shareholders' agreement will further provide certain restrictions on the transfer of the shares of WTT common stock issued to Damany and Investcorp in the transaction, and certain registration rights covering such shares, which will be exercisable for a certain period of time beginning six months after the closing of the acquisition.

The transaction has been unanimously approved by WTT's board of directors. WTT's board of directors received an opinion, dated September 27, 2004, from Capitalink, L.C. that as of such date, based upon and subject to the assumptions made, matters considered, and limitations on its review as set forth in the opinion, the Purchase Price is fair, from a financial point of view, to WTT's shareholders. Completion of the transaction is subject to approval of WTT's shareholders at a special meeting of shareholders to be announced at a later date, as well as other customary closing conditions. Assuming the satisfaction or, where permissible, waiver of the closing conditions, WTT expects to close the transaction by no later than March 31, 2005.

Wireless Telecom Group Inc.

Willtek Communications GmbH

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