[MLB-WIRELESS] Proxim and Agere

[Andy Freeman]

This will be interesting.  Proxim regularly "dream-up" a new standard
for wireless communication and have only recently started to make
802.11b cards. (they still make their proprietary cards too!)



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Proxim Buys Agere's Wi-Fi Products
By Eric Griffith 

 

Looking to concentrate business in the semiconductor area of WLANs,
Allentown, PA-based Agere Systems has agreed to sell its 802.11
equipment business, including the ORiNOCO line of products, to Proxim
Corporation of Sunnyvale, CA for $65 million in cash. 

Agere will retain its core business of chips, modules and card
components. 

Proxim's take will include all WLAN products Agere made for homes and
SOHOs, on up to equipment for ISPs and outdoor use, including access
points, broadband gateways,, the radio back bone, and the ORiNOCO
branded client card business. 

In a conference call this morning, Proxim chairman and CEO Jonathan
Zakin said, "The transaction with Agere broadens and expands our
capabilities in the mobile wireless backhaul marketplace, last mile
access, home networking, campus connectivity (both WAN and LAN side),
and it adds depth and breadth to our technology portfolios, primarily in
extreme broadening of our software portfolios, complimenting our
hardware capabilities." 

Once the transaction closes, Proxim expects to see an immediate revenue
increase over the first two quarters. The deal can't take place until it
gets regulatory approval -- the companies expect that to take 60 days,
sometime in the third quarter. 

To finance the acquisition, Proxim has received a collective investment
of $75 million from Warburg Pincus and Broadview Capital Partners. In
return each will get approximately $41 million worth of convertible
preferred stock, worth a conversion price of $3.06 per share. The
remaining $34 million will convert to stock based on stockholder
approval. This will represent about 28% of Proxim's shares outstanding.
Approval will likely happen three months after the transaction closes in
a special meeting Proxim expects to hold; the company's largest stock
holders, CEO Zakin and Ripplewood Holdings LLC, have already agreed to
it. They control 32% of the vote. 

Agere and Proxim are also entering a three year strategic partnership
where they will have a patent cross license to share information --
including the patent-related litigation they currently have going on.
Agere will provide chips and modules for Proxim's future 802.11-based
products. 

Zakin concluded, "The transaction will provide us with scale and
synergies in cross selling of each others products, expansions of our
markets (particularly in Latin America and the Far East), and the
ability to get products to market six to nine months sooner that are
integrated between low-cost last-mile access using 802.11a and b
technologies with our spread spectrum backhaul technologies."	



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