ADC completes acquisition of LGC Wireless
December 6, 2007 -- The combination of ADC and LGC accelerates the execution of ADC's All IP Radio Access Network (RAN) platform, aimed at carriers and enterprises.
With this acquisition, ADC says it leverages its advanced outdoor wireless products, global scale, worldwide customer base, and innovations in connectivity with LGC's advancements and market leadership in the in-building wireless solutions market. The combination of companies creates a superior platform for serving carriers' capacity and coverage needs, says ADC. The company also contends that the acquisition further diversifies its revenue base by "more than doubling" its wireless business to over 9% of total sales, and is expected to help increase the company's overall growth rate.
"We are excited to finalize the strategic acquisition of LGC Wireless as it bolsters our momentum in capturing share in the fast growing wireless capacity and coverage market. LGC's innovative in-building solutions add scale to our existing line of outdoor wireless products and supports ADC's long-term goal of being the leading global provider of network infrastructure solutions," says Robert E. Switz, president and CEO of ADC. "The value created in combining the strengths of both companies will advance ADC's ability to deliver on our vision of the next-generation radio access network and better meet the wireless network demands of our customers worldwide."
According to a press release, ADC has acquired LGC for $169 million. This includes a purchase price for the outstanding equity interests of LGC for approximately $148.5 million. Under the transaction ADC paid cash for all the shares of LGC outstanding. Optionholders of LGC shares were given the opportunity to either receive a cash payment for their options or an exchange of the options for options to acquire ADC shares. ADC also has assumed certain transaction expenses, agreed to assure payment of LGC employee bonuses and assumed LGC's current debt, in aggregate approximately $20.5 million.
In the United States, Middle East and Latin America, LGC had sales of $83 million in the last 12 months ended September 30, 2007, compared to sales of $43 million in the year ended December 31, 2006. The company has approximately 240 employees and operates facilities in San Jose and Mountain View, CA.
ADC expects to take a charge for various acquisition-related expenses, the amount of which has not been determined. Excluding this charge and future amortization of acquired intangibles and stock option expense, ADC expects the acquisition to be non-dilutive to earnings per share from continuing operations in fiscal 2008 and around $0.02-0.04 accretive in fiscal 2009.
The combination of ADC and LGC accelerates the execution of ADC's All IP Radio Access Network (RAN) platform, aimed at carriers and enterprises.