Canadian equipment manufacturer DragonWave has acquired European vendor Nokia Siemens Networks’ (NSN) microwave transport business in a deal worth up to €110m.
In a transaction the companies expect to close in Q1 2012, DragonWave’s…
Canadian equipment manufacturer DragonWave has acquired European vendor Nokia Siemens Networks’ (NSN) microwave transport business in a deal worth up to €110m.
In a transaction the companies expect to close in Q1 2012, DragonWave’s consideration includes €10m in cash, €5m worth of its common stock, employee liabilities of approximately €10m, and a capital asset lease arrangement worth around €5m. In addition, DragonWave has agreed to a sales-based 18-month earn-out period, which could see the group pay NSN approximately €80m if it hits revenue targets.
DragonWave plans to finance the deal through a combination of cash on hand and increased debt facilities from Comerica Bank and Export Development Canada. According to the company, these debt facilities will be entered into on, and subject to, closing the acquisition.
The two companies have also entered into a strategic partnership that will see NSN retain responsibility for the division’s solution sales and services, while DragonWave will oversee its product line, including R&D and operations.
Following the acquisition, the companies expect that 360 NSN employees – mainly based in Italy and China – will be transferred to DragonWave.
“Through this strategic relationship, customers would continue to receive high-quality services and sales support from Nokia Siemens Networks, while DragonWave’s best of breed products would ensure they have access to industry leading technology,” explained Marc Rouanne, NSN’s head of Network Systems.
Peter Allen, CEO of DragonWave, said: “This relationship is transformational, giving us the ability to serve customers who want to access an integrated solution. In addition, it provides DragonWave an expanded technology base to address those customers who wish to purchase stand-alone best-in-breed products. Our increased scale, diversity and customer footprint, coupled with significantly enhanced resources and capabilities, will provide a solid foundation for faster innovation and broader market penetration.”
DragonWave was advised by Canaccord Genuity Corp.
