LONDON The bulk of Filtronic plc's wireless infrastructure division has been sold to Powerwave Technologies, Inc. in a deal valued at about $336 million.
Powerwave (Santa Ana, Calif.) said last month it had entered into exclusive negotiations to buy the Shipley, England-based company's power amplifiers business.
The product lines included in the deal include transmit/receive filters, integrated remote radio heads and power amplifier products, all for use in base station equipment.
The acquisition, which does not include point to point radio backhaul equipment, nor Filtronic's compound semiconductors and defence electronics businesses, is expected to be concluded in the third quarter of the year, but is still subject to shareholder approval and the usual closing conditions.
Under the terms of the acquisition, Powerwave will issue 20.7 million shares of Powerwave common stock and pay $150 million in cash to Filtronic. This means Flltronic will own about 13 percent of Powerwave's equity.
The Wireless Infrastructure business's gross assets as at May 31, 2005 were £101.1 million ($186 million) and in the year ended May 31, 2005, the business generated operating profits of £18.1 million ($33.4 million). Revenues were running at about £180.5 million ($335 million) over a 12 month period, but this included sales of the point to point backhaul equipment, which are excluded in the deal.
Ronald Buschur, President and Chief Executive Officer of Powerwave, said in a statement Monday (June 12): "We believe that the increased purchasing power from this acquisition will enable Powerwave to achieve significant cost synergies while further leveraging our global manufacturing capabilities."
He said this "strategic" acquisition will provide Powerwave with the leading position in transmit and receive filter products, as well as broaden Powerwave's RF conditioning and base station solutions product portfolio in addition to adding significant additional technology to its intellectual property portfolio.
Powerwave plans to integrate Filtronic's transmit and receive filter capabilities into its base station solutions as well as promote standardization of products and use of common design platforms.
The business being acquired has engineering and design locations in the UK, US and Finland and manufacturing locations in China and Hungary, as well as additional manufacturing support in the North American market.
Powerwave said it expects to achieve in excess of $10 million in annual cost savings following integration of the acquisition, coming from efficiencies in manufacturing, purchasing, research and development, and general and administrative overhead. It hopes to show these savings within a year of the deal going through.