Wireless Vendors Proxim, Western Multiplex To Merge

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Wireless vendors Proxim and Western Multiplex have agreed to merge in a deal valued at $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.

Under the terms of the agreement, the combined company will keep the Proxim name and be headquartered in Sunnyvale.

Jonathan Zakin, chairman and CEO of Western Multiplex, will retain his position with the combined company. Proxim chairman and CEO David King will become president and COO.

Proxim's strength in the home wireless networking and the enterprise WLAN markets 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 up to 430 Mbps.

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, he 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.

Zakin said the merger would allow the new Proxim to provide integrated end-to-end wireless solutions through the channel partners of both companies.

The boards of Proxim and Western Multiplex have approved the merger. Under terms of 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 revenue for the company for the year ended Sept. 30, was $222 million.

The deal is subject to customary approvals.

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