Broadband wireless powerhouse merger scuttled
Wireless technology providers Western Multiplex and Adaptive Broadband call off their $645 million merger plans a week after Adaptive missed its second-quarter sales projections by 75 percent.
Disclosure of the about-face was announced Wednesday. The merger plans were announced in November. Western Multiplex is a fixed wireless communications system provider. Adaptive Broadband makes high-speed wireless Internet products.
At the time, both sides said they were creating a "broadband wireless powerhouse." Western Multiplex was planning to pay $17.15 for every Adaptive share. But, like many telecommunications-related companies, both concerns were hit by the ongoing downturn in the fortunes of telecommunications providers and the equipment makers that sell to them.
But Adaptive Broadband shares were crushed last week when the company said its fiscal second-quarter sales were about 75 percent below expectations. Adaptive also lowered revenue expectations for fiscal year 2001 from $31 million to $8 million.
"The fixed wireless industry currently is experiencing weakness in the United States, and financing is eroding for emerging carriers," Adaptive's Daniel Scharre said in a statement.
"From a stock point of view, fixed wireless specifically, and telecommunications stocks, in general, have taken a beating, making it very difficult to put a monetary valuation on this transaction."