Powerwave Technologies To Acquire Selected Wireless Assets Of Remec, Inc.
SANTA ANA, Calif. - Mar. 14, 2005 -
Powerwave Technologies, Inc. (NASDAQ: PWAV) today announced that it has
signed a definitive agreement with REMEC, Inc. (NASDAQ: REMC) to
acquire certain product lines of REMEC’s Wireless Systems business.
The purchase includes certain selected assets and liabilities related
to REMEC’s Wireless business. These specific product lines include RF
conditioning products, filters, tower-mounted amplifiers and RF power
amplifiers. The proposed acquisition does not include other businesses
or obligations of REMEC, Inc.
Ronald J. Buschur, President and
Chief Executive Officer of Powerwave, stated: "Our proposed acquisition
of selected assets of REMEC’s Wireless Systems business will further
expand Powerwave’s leadership position in the wireless infrastructure
marketplace while deepening and strengthening our relationships with
our customers. We will be able to significantly expand our RF
conditioning product lines, filter products, as well as complement our
existing tower-mounted amplifiers and RF power amplifier products. We
are also excited about the opportunity to further leverage one of the
broadest portfolios of products and services in the wireless industry
to enhance our position in both OEM and network operator channels. In
addition, 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."
Thomas
Waechter, Chief Executive Officer and President of REMEC, said: "The
board of directors and management believe that the divestiture of the
assets of the Wireless Systems business will provide significant value
to REMEC shareholders and that the combination of those assets with
Powerwave will create a leading competitor in the commercial wireless
market. It is the Company's intention to distribute all of the stock
of Powerwave and a portion of the cash directly to the shareholders
shortly after the transaction is completed, subject to business, tax
and legal requirements. We believe that receiving stock of Powerwave
will allow our shareholders to directly participate in the success of
the combined entity."
The boards of directors of both
Powerwave and REMEC have unanimously approved the acquisition. The
transaction is subject to the approval of REMEC's shareholders, as well
as customary closing conditions and certain regulatory approvals. Under
the terms of the acquisition, Powerwave will issue 10 million shares of
Powerwave common stock and pay $40 million in cash to REMEC. Based on
Powerwave’s closing share price as of March 11, 2005, the transaction
is valued at approximately $118 million. Powerwave and REMEC expect
the closing of the transaction to occur in the beginning of the third
quarter of calendar 2005. Immediately following the close, REMEC will
have an equity interest in Powerwave of approximately 7% on a
fully-diluted basis, assuming conversion of Powerwave’s convertible
subordinated notes.
This strategic acquisition will strengthen
Powerwave’s leading positions in antenna and base station solutions, as
well as broaden Powerwave’s RF conditioning and filter product
portfolio in addition to adding over 90 US and international patents to
its intellectual property portfolio. The product lines to be acquired
had a trailing 12-month revenue run rate for calendar year 2004 of
approximately $250 million. Powerwave believes that the proposed
acquisition creates additional economies of scale for key commodity
components that leverage Powerwave’s existing supply chain
efficiencies. The Company also plans to integrate research and
development of base station solutions as well as promote
standardization of products and use of common design platforms. From
an operations perspective, Powerwave plans to leverage its existing
world class manufacturing expertise and rationalize excess facilities
to enable the Company to achieve significant cost synergies. Powerwave
currently estimates that it will achieve in excess of $50 million in
annual cost savings following integration of the acquisition, coming
from efficiencies in manufacturing, purchasing, research and
development, and sales.
The transaction is expected to be
accretive to Powerwave’s earnings per share in the first full quarter
following the completion of the integration activities, currently
expected to be by the first calendar quarter of 2006, excluding any
transaction related expenses. Powerwave believes that combined
revenues for calendar year 2006 should exceed $950 million. Powerwave
also currently estimates that closing and consolidation expenses will
be in the range of $20 to $40 million.
Deutsche Bank
Securities acted as sole financial advisor to Powerwave. Needham &
Company, Inc. acted as sole financial advisor to REMEC.
Webcast
Powerwave
will be conducting a conference call to discuss the proposed
acquisition on Monday, March 14, 2005 at 9:00 am Eastern Time.
Powerwave will also provide a simultaneous webcast and slide
presentation of its conference call. To participate in the conference
call, please call (617) 786-2904, confirmation code 62356405. To
access this audio and visual webcast, log onto the Powerwave Investor
Relations web page at www.powerwave.com and select the Powerwave
Conference Call. The call will last for approximately one hour. A
replay of the webcast will be available beginning approximately two
hours after completion of the initial webcast. Additionally, an audio
playback of the conference call will be available approximately on hour
after completion of the call and will remain available until March 24,
2005 by calling (617) 801-6888 and entering confirmation number
34431564.
About Powerwave Technologies
Powerwave
Technologies, Inc., is a global supplier of end-to-end wireless
solutions for wireless communications networks. Powerwave designs,
manufactures and markets antennas, boosters, combiners, filters,
repeaters, multi-carrier RF power amplifiers and tower-mounted
amplifiers and advanced coverage solutions, all for use in cellular,
PCS and 3G networks throughout the world. Corporate headquarters are
located at 1801 E. St. Andrew Place, Santa Ana, Calif. 92705.
Telephone (714) 466-1000. For more information on Powerwave’s advanced
wireless coverage and capacity solutions, please call (888)-PWR-WAVE
(797-9283) or visit our web site at www.powerwave.com. Powerwave,
Powerwave Technologies and the Powerwave logo are registered trademarks
of Powerwave Technologies, Inc.
About REMEC
REMEC
is a designer and manufacturer of high frequency subsystems used in the
transmission of voice, video and data traffic over wireless
communications networks and in space and defense electronics
applications. REMEC is located at 3790 Via de la Valle, Del Mar, CA
92014. For more information, visit the company’s Web site at http://www.remec.com/ or call (858) 505-3713.
FORWARD-LOOKING STATEMENTS
This
press release contains "forward-looking" statements including
statements regarding benefits of the proposed acquisition, integration
plans and expected synergies, anticipated future financial and
operating performance and results, including estimates for growth, cash
flows, consolidation costs, the time schedule for closing the
transaction, satisfaction of conditions to closing, accretion to per
share earnings and expectations for our products and plans for
development and expansion. These statements are based on Powerwave’s
management's current expectations. There are a number of risks and
uncertainties that could cause actual results to differ materially. For
example, the parties may be unable to obtain the necessary approvals
required for the acquisition, including regulatory approvals and
approval of REMEC’s shareholders. Problems may arise in successfully
integrating the acquired business. The acquisition may involve
unexpected costs. We may be unable to achieve cost-cutting synergies.
Our businesses may suffer as a result of uncertainty surrounding the
acquisition. Other potential risks and uncertainties include, but are
not limited to: customer order cancellations or deferrals; delays or
cancellations of wireless network capacity expansions and buildouts for
both existing 2G and 2.5G networks and new 3G networks; we require
continued success in the design of new products and such products must
be manufacturable and of good quality and reliability; our dependence
on a limited number of customers for the majority of our revenues
exposes us to potential reductions in revenue if such customers cease
purchasing products from us; our business requires continued favorable
business conditions and growth in the wireless communications market.
Powerwave also notes that its reported financial performance and
period-to-period comparisons are not necessarily indicative of the
results that may be expected in the future and Powerwave believes that
such comparisons cannot be relied upon as indicators of future
performance. Powerwave also notes that the market price of its Common
Stock has exhibited high levels of volatility and therefore may not be
suitable for all investors. More detailed information on these and
additional factors which could affect Powerwave's operating and
financial results are described in Powerwave's Form 10-K for the fiscal
year ended January 2, 2005, which is filed with the Securities and
Exchange Commission, and other risks detailed from time to time in the
Company's reports filed with the Securities and Exchange Commission.
Powerwave urges all interested parties to read these reports to gain a
better understanding of the many business and other risks that
Powerwave faces. Additionally, Powerwave undertakes no obligation to
publicly release the results of any revisions to these forward-looking
statements which may be made to reflect events or circumstances
occurring after the date hereof or to reflect the occurrence of
unanticipated events.
WHERE TO FIND ADDITIONAL INFORMATION ABOUT THE TRANSACTION
As
part of the transaction, Powerwave intends to file a registration
statement on Form S-4 and REMEC intends to file a proxy statement.
Investors and security holders are urged to read these filings when
they become available because they will contain important information
about the transaction. Investors and security holders may obtain free
copies of these documents (when they are available) and other documents
filed with the Securities and Exchange Commission at the Securities and
Exchange Commission’s web site at http://www.sec.gov/.
In addition, investors and security holders may obtain free copies of
the documents filed with the Securities and Exchange Commission by
Powerwave by contacting Investor Relations at (714) 466-1000.
Investors and security holders may obtain free copies of the documents
filed with the Securities and Exchange Commission by REMEC by
contacting Investor Relations at (858) 505-3356.
Back to: 2005 Press Releases