BRZE) and Floware
Wireless Systems (Nasdaq:
FLRE) have announced a merger.
The stock-for-stock transaction is hoped to infuse the combined company
with enhanced growth potential based on the foundation of each company’s
worldwide customer base.
Under the terms of the merger agreement, which has been unanimously
approved by both boards of directors, each ordinary share of Floware will
be converted into 0.767 ordinary shares of BreezeCOM in a tax-free transaction..
The merger is to be accounted for as a purchase transaction.
A new name
The new combined company will subsequently be renamed, according to the
announcement. The new name, however, has not been released.
The new company will have approximately 53.3 million shares outstanding,
with the current BreezeCOM shareholders owning 55% of the combined company
and current Floware shareholders owning 45% of the combined company, on
a fully diluted basis. Based on closing prices on April 4, 2001, the new
company will have a pro forma market capitalization of approximately $330
million and over $220 million of cash.
The transaction is expected to close during the third quarter of 2001,
and is subject to approval by shareholders of BreezeCOM and Floware, regulators
and other customary closing conditions.
BreezeCOM and Floware complement each other in terms of product offering,
geographical presence, customers and distribution channels. Both companies
supply point-to-multipoint broadband wireless access solutions. BreezeCOM
targets the residential and small office home office (SOHO) markets selling
to both ISPs and carriers and Floware targets small-to-medium enterprises
(SME) and the multi-tenant unit market (MTU) via telecom carriers. The
combined company will have a point-to-multipoint product offering with
transmission frequencies ranging from 2.4GHz in the unlicensed band up
to 26GHz in the licensed band.
Both BreezeCOM and Floware are headquartered in Israel, and operate
globally. BreezeCOM has a sales operation located in the US, which has
enabled the company to establish a presence in North America and penetrate
Latin America. BreezeCOM also has a presence in Scandinavia, Eastern Europe,
Floware’s primary sales channel is through telecom system integrators.
Floware has a strategic relationship with Siemens, which will hold over
10 percent of the combined company after the merger. Floware has also
penetrated Latin America and Asia.