Two years after putting Western Multiplex on the selling block, Glenayre Technologies Inc. signed an agreement to sell its microwave radio business to Ripplewood Holdings L.L.C. of New York and Leeward Technology partners of California.
According to the agreement, Glenayre will keep a 5-percent ownership stake in the company, selling the rest for between $36 million to $38 million. The deal is expected to close in the fourth quarter.
Additionally, Glenayre named Clarke Bailey chairman of the board, following the resignation of former chairman Ramon Ardizzone. Bailey has served as a director since 1990 and was chief executive officer from November 1992 to March of 1994. Ardizzone will remain a director and chairman of the firm’s executive committee.
Glenayre originally bought the Multiplex unit in 1995 and put it up for sale in September 1997, when it bought Wireless Access Inc. and Open Development Corp. Glenayre wanted to get rid of businesses not fully in line with the company’s new focus.
“Completion of the Western Multiplex deal will allow us to better align Glenayre with the most appropriate markets for the company’s strategic objectives and provides additional financial resources to accomplish our goals,” said Eric Dogget, Glenayre president and CEO.
In the two years it’s been trying to sell the unit, Glenayre several times said it was close to a deal, but none were announced. Mark Smalley, vice president of investor relations, last year said the microwave unit had experienced a slowdown in sales, which made the unit less attractive to buyers. Additionally, a major interested buyer, microwave company P-Com Inc., found itself struggling with plunging stock prices and a class-action investor lawsuit.
Smalley at the time said the price tag for the unit was between $40 million and $70 million, and that the company would not let Western Multiplex go at a discount.
“It’s a profitable unit,” he said. “We’re not going to give it away.”
Donaldson, Lufkin and Jenrette served as Glenayre’s adviser.
Technically, Leeward Technology is the buyer, with support from Ripplewood Holding and others. Ripplewood is a private equity firm that invests in several types of companies, making technology investments through affiliate Leeward.
According to a Ripplewood Holding spokesman, Leeward plans to grow and support the Western Multiplex business. In particular, the company said it was most interested in the wireless Internet opportunities the sale provides.
“We are excited about the prospects of working with the management to aggressively pursue new wireless Internet infrastructure opportunities,” said Jonathan Zakin, Leeward chief executive officer. He named the Tsunami 10/100 BaseT wireless Ethernet bridge as particularly useful for building out broadband Internet infrastructure.
“The opportunity to provide high-speed connectivity to Internet service providers and end users that find it difficult or expensive to lay fiber-optic cable is enormous.”
Amit Zoufonoun, currently general manager of Western Multiplex, will become its president at the transaction’s close.
