Alvarion in talks to sell WiMAX unit to Fortissimo
Jan 15, 2013 (Globes - McClatchy-Tribune Information Services via COMTEX) --
Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR) has put its WiMAX division, once one of the company's core businesses and main growth engine, up for sale. Fortissimo Capital, the private equity fund run by Yuval Cohen, which reportedly once tried to acquire Alvarion in toto is in talks to buy the WiMAX division. Sources inform "Globes" that a US company is also interested in acquiring the division.
Several months ago, Alvarion announced that it was reviewing a range of options about its WiMAX business, including the sale of the division.
Alvarion and Fortissimo declined to comment on the report.
Alvarion will reportedly sell the WiMAX division for a few tens of millions of dollars, and that part of the proceeds will be subject to predetermined milestones. The division has tens of millions of dollars in annual sales, but it has not been profitable for several quarters. If Fortissimo acquires the division, it will probably merge it with subsidiary Telrad Networks Ltd., a developer of communications infrastructure equipment, and which has not been a particularly successful investment for Fortissimo so far.
LTE trumped WiMAX
Alvarion has been in crisis for years, resulting in waves of layoffs and the collapse of its market cap to just $28 million. The company was created through the merger of Breezecom and Floware in 2001 to provide wireless broadband communications equipment, based on WiMAX technology, which was considered the next generation for mobile networks. But WiMAX lost out to LTE for 4G networks, and WiMAX was relegated to a connectivity technology to broadband networks in remote regions. In recent years, Alvarion has turned its attention to other technologies, acquiring Wavion Networks from Elron Electronic Industries Ltd. (TASE: ELRN) in 2011 for this purpose.
Assuming that Alvarion sells its WiMAX division, it will be left with two core businesses: vertical enterprise communications solutions; and mobile capacity and coverage solutions and network traffic congestion solutions. A sale would help Alvarion's dwindling cash reserves, which totaled $15 million at the end of September 2012. The company sold patents and its debt rights in Nortel Networks last October to improve its liquidity.
In a separate development, Alvarion announced that will sell Wi-Fi base stations to Hitachi Cable Networks Ltd. to cover major train stations and congested areas in downtown Tokyo business districts.
___ (c)2013 the Globes (Tel Aviv, Israel) Visit the Globes (Tel Aviv, Israel)
at www.globes.co.il/serveen/globes/nodeview.asp fid=942 Distributed by MCT
[ Back To TMCnet.com's Homepage ]