Western Multiplex Buys Adaptive For $645 Million

Fixed broad wireless manufacturer Western Multiplex Corp. nabbed competitor
Adaptive Broadband Corp. for $645 million in stock Monday.

The deal, unanimously approved by both company’s board of directors, was
met with investor approval as Adaptive’s stock saw a nearly 25 percent
surge, to $16 per share before market open.

Daniel Scharre, Adaptive Broadband president and chief operating officer,
will remain with Western Multiplex as the president and chief operating
officer, and a seat on the board of directors. Frederick Lawrence,
Adaptive chairman and chief executive officer, will become a member of the
combined company’s boar of directors.

“This transaction take us to the next level of business opportunities,”
Scharre said. “Western Multiplex enables us to give customers more choices
for wireless connectivity, and we have complementary market-leading
technology. We get the chance to join an industry leader that has been
driving adoption of fixed-wireless, and we share a common philosophy and
vision for the future.”

The merger joins the strengths of Western Multiplexes telco and IP-based
systems with Adaptive’s AB-Access platform, which spans the 2 to 42GHz
spectrum.

Jonathan Zakin, Western Multiplex chairman and chief executive officer,
said the acquisition takes both companies out of its particular niche
market and into a position to compete with national providers like Cisco
Systems, Inc., and Airspan Networks, Inc..

“This transaction is the first step toward the consolidation of the
wireless infrastructure industry, which is both fragmented and niche
oriented,” Zakin said. “The combined company reinforces our belief that to
best serve our customers, we need to provide full end-to-end wireless
connectivity from the side of the Internet cloud or fiber ring to an end
users’ home or office.

“We believe this combination uniquely positions us
to meet the needs of the major deployers of wireless networks,” he said.

Western Multiplex has been an investor darling since it’s initial public
offering this August. Moderated valued, the company has seen regular
revenue increases of 50 percent every quarter.

According to Zakin at the
time of the IPO, the main reason the company went public was to create a
currency to purchase other companies. This freed the company to use its
IPO windfall in other critical areas.

The buyout still needs the blessing of the shareholders and government
regulators before the sellout is finalized. Western Multiplex majority
shareholder WMC Holding, LLC, has already agreed to the merger.