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Proxim sails up Agere's Orinoco
Buys WLAN brand, gets funding
Proxim is to buy the ORiNOCO-branded WLAN equipment business from Agere Systems for $65m in cash. Following the acquisition, Proxim claims it will have market leadership in the 802.11 sector.
The acquisition is funded by Warburg Pincus and Broadview Capital Partners which are investing $75m in return for approx. 28 per cent of stock in the enlarged Proxim.
Agere will continue to make 802.11-based components and it will have a significant customer in Proxim which has signed a three-year supply deal. By divesting its branded products business, Agere should also find it easier to win more OEM contracts - companies are rarely keen to source parts from suppliers which also compete with them downstream.
Proxim say the purchase will accelerate its product rollout by two quarters and expects the deal to be immediately accretive. ®