Andrew Acquires Allen Telecom

Wireless infrastructure subsystems supplier Andrew Corp. is acquiring Allen Telecom in an all-stock transaction valued at approximately $500 million. The Orland Park, Ill.-based Andrew said the deal positions it to support CDMA, TDMA and GSM wireless standards, as well as emerging 3G technologies.

Under terms of the agreement, Allen shareholders will receive 1.775 shares of newly-issued Andrew stock for each Allen share that they currently own. Based on Andrew’s closing price of $9.01 per share on Feb. 14, the consideration represents a 21 percent premium over Allen’s share price on the same day. Following completion of the transaction, on a fully diluted basis, excluding Allen preferred stock, Andrew shareholders will own approximately 64 percent and Allen shareholders will own approximately 36 percent.

The transaction is expected to be accretive to Andrew earnings per share in the first full year following completion and will be structured to qualify as a tax-free exchange. The combined company will have nearly 7,000 employees, pro forma annual revenues of approximately $1.3 billion, and annual R&D spending of $90 million.

Completion of the transaction, which is expected to occur in the first half of this year, is subject to approval of shareholders of both companies, expiration of the applicable waiting period under the Hart-Scott-Rodino Act and other customary closing conditions.

The combined company will be the number one global supplier of coaxial cables, RF power amplifiers, terrestrial microwave antennas, network geolocation solutions, and repeaters and in-building systems; and the number two global merchant provider of filters and base station antennas.

“This is a landmark transaction that fundamentally redefines the dynamics of our industry. It extends Andrew’s leadership in the wireless infrastructure subsystems market and positions us to lead the industry through its consolidation phase,” said Ralph Faison, CEO and president of Andrew.

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