Western Multiplex: The End-to-End Solution

Cellular One has a network that covers more than 20 sites – across most of
southwestern Colorado. However, the company faced a big problem; that is,
much of the land is vertical. In other words, there are many mountains,
ravines and valleys.

But there was a solution: Western Multiplex. The company’s products were
able to effectively spread the radio spectrum.

Western Multiplex is a
leader in broadband fixed wireless systems. The company has demonstrated
strong growth. In the past quarter, revenues were $29.9 million, which was
a 152.7 percent increase from the same period a year ago. The company is
even profitable, with net income of $1.7 million.

Here’s a look at the company’s main products:

Tsunami: This is a suite of wireless Ethernet bridges, which work
across licensed and license-free connections. It is a strong solution for
wide-area networks. The Fast Ethernet models allow for simultaneous
wireless connections for PBX and video conferencing equipment.

LYNX Spread Spectrum Radio: This provides for unlicensed wireless
interconnect solutions for a variety of telecom interfaces. They operate in
the 2.4 and 5.8 GHz ISM bands and also the 5.8 GHz UNII band.

Yesterday, the company announced an acquisition of
Adaptive Broadband .
Like so many other acquisitions, Western Multiplex saw its stock price tumble.
It was down $3-3/4 to $9.

The acquisition is a bold move and critical. It will help consolidate the
fast-growing broadband fixed wireless marketplace. While Western Multiplex
develops products that transmit from fiber networks to phone carriers and
ISPs, Adaptive has products that transmit data from ISPs to homes and
offices. Thus, the new entity will be a end-to-end solution for customers.

In terms of the financials, Adaptive has been a strong performer. In the
past quarter, revenues were $24.2 million, a 42 percent sequential increase.
The order backlog is $72.4 million and there is $120 million in the bank.

By all accounts, the merger looks like a classic example of synergy. And
with both companies growing at a rapid rate, the recent fall in the stock
price of Western Multiplex looks like a good opportunity.