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Western Multiplex snaps up Adaptive Broadband

Western Multiplex Corp. (Nasdaq: WMUX) said Monday it will buy Adaptive Broadband Corp. (Nasdaq: ADAP) for about $645 million in stock.

Shares in Adaptive Broadband, maker of broadband fixed wireless point-to-multipoint equipment, were up 3.19 to 16, or 24 percent on the Island ECN before market open Monday. The deal values Adaptive shares at about $17.15 each based on the closing price of $12.75 per share of Western Multiplex on November 10.

Western Multiplex has agreed to issue stock valued at $645 million, based on its closing price November 10. The merger is part of the companies' strategy to obtain the technological breadth and scale to meet the increasing demand for integrated products, vendor stability, service, and support.

As a provider of comprehensive end-to-end broadband fixed-wireless equipment, the combined company be able to offer point-to-point and point-to multipoint products for last mile access, campus and enterprise connectivity and wireless access backhaul, the companies said.

Under the terms of the deal, Adaptive Broadband will become a wholly owned subsidiary of Western Multiplex. On the closing of the merger, Adaptive Broadband's shareholders will receive a fixed exchange ratio of 1.345 Western Multiplex common shares for each share of Adaptive Broadband stock owned by them at such time.

The deal is expected to add to Western Multiplex's cash earnings per share (earnings before amortization and other non-cash expenses) by the end of calendar year 2001 (excluding acquisition-related charges). Jonanthan Zakin, Western Multiplex Chairman and CEO, will remain Chairman and CEO of the combined company.

The transaction, which is expected to close in the first quarter of 2001, will be tax-free to U.S.shareholders.

Frederick Lawrence, Adaptive Broadband Chairman and CEO will become a member of the combined company's board of directors.