Western Multiplex CEO: Proxim Merger Will Increase Partner Sales

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Wireless vendors Proxim and Western Multiplex are hoping their proposed merger will allow them to leverage the channel partners of each company to increase sales, said Jonathan Zakin, chairman and CEO of Western Multiplex.

In an interview with CRN, Zakin said Western Multiplex didn't have the infrastructure to recruit and train VARs fast enough, but the merger would give the company access to Proxim's larger partner base.

Upon completion of the merger, the combined entity plans to integrate the two companies' partner programs into one, Zakin said.

Western Multiplex currently has about 650 active partners in the high-end enterprise networking market, he said. A subset of Proxim's some 1,000 active partners has been targeted as likely candidates for deploying Western Multiplex's high-speed Ethernet point-to-point and point-to-multipoint bridges, Zakin said.

Proxim's strength in the WLAN market complements Western Multiplex's point-to-point high-speed wireless Ethernet bridges and last-mile access products, Zakin said. Western's Tsunami wireless Ethernet bridges are used as WAN connections between buildings and campuses, with speeds ranging from 10 Mbps to 1 Gbps.

Jack Davis, CEO of SideBand Systems, said the Beverly, Mass.-based solution provider is currently a partner with both Proxim and Western Multiplex. "We carry both product lines," he said. "Proxim is strong in in-building systems and Western Multiplex is strong in building-to-building and building-to-multibuilding systems. If they can come up with a seamless scheme that integrates the two strengths, we'd look forward to that."

Davis said he'd especially like to see Proxim's "more elegant" Web-based interface be integrated into Western Multiplex's products.

Proxim and Western Multiplex late Wednesday agreed to merge in a deal valued at some $289 million. The deal would create a combined company with products ranging from low-end consumer HomeRF to 802.11a and 802.11b wireless LAN gear, as well as wireless Ethernet bridges and wireless carrier backhaul products.

The combined company will keep the Proxim name and be headquartered in Sunnyvale.

Zakin would retain his position with the combined company. Proxim Chairman and CEO David King will become president and COO.

King said the deal would give Proxim access to Western Multiplex's solution provider channel. Proxim, strong in the health-care and government markets, hasn't penetrated the corporate enterprise market, he said. Also, Proxim's 802.11b-based wireless Ethernet bridges haven't gained the traction of its in-building WLAN products, King said.

Western Multiplex's channel partners largely consist of Cisco partners complementing Cisco's WLAN products with Western's high-speed Ethernet building-to-building bridges. While Cisco produces WLAN product, it does not produce high-speed wireless Ethernet bridges.

The boards of Proxim and Western Multiplex have approved the merger. Under the agreement, each outstanding share of Proxim common stock will be converted into 1.8896 shares of Western Multiplex common stock. Upon completion, Proxim stockholders and Western Multiplex stockholders will each own about 50 percent of the combined company.

Combined pro forma revenues for the company were $222 million for the 12 months ended Sept. 30, 2001.

The deal is subject to customary approvals.

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