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Aeroflex to pay $81 million for UbiNetics

Posted: 24 May 2005 ?? ?Print Version ?Bookmark and Share

Keywords:network? wireless communication?

Aeroflex Inc. is continuing its onslaught on U.K. based test and measurement companies with the proposed purchase, for $81 million in cash, of the group within UbiNetics that specializes in testing of wireless communications equipment and networks.

Aeroflex cautions that a definitive agreement has not yet been signed. The diversified group has already bought over the past few years Marconi Instruments and Racal Instruments.

The so-called SPG Test and Measurement group within UbiNetics Holdings Ltd focuses on two wireless applications - infrastructure testing and mobile handset testing. SPG's products focus on global wireless standards and the supply of handset emulation products and load analysis tools that are designed to assist with the research and development of handset and infrastructure products and deployment of mobile networks.

The company, based near Cambridge, has been at the forefront of developing test gear for emerging cellular networks and handsets, including 3G and now HSDPA.

For the twelve months ended March 31, 2005, SPG had sales of approximately $34 million and operating income before exceptional items of more than 20 percent. Aeroflex chief financial officer Michael Gorin says the acquisition is expected to both produce significant operating synergies and be accretive to fiscal 2006 earnings on both a GAAP and pro forma basis.

Under the terms of the deal, UbiNetics, in addition to the purchase price paid at closing, could earn up to an additional $4 million, depending on the level of sales and gross margin in excess of agreed levels for the twelve months ending June 30, 2006.

Len Borow, Vice Chairman and COO of Aeroflex said in a statement: "The addition of SPG's wireless test and measurement products and technologies is expected to enhance Aeroflex's wireless product portfolio and is designed to enable us to provide more complete testing solutions for the development, manufacturing and service markets and to have greater exposure to the research and development labs of the world's leading network vendors and operators.

"We believe that there is a significant synergy between SPG and Aeroflex's Test Solutions division, which is expected to lead to important opportunities for future product developments."

- John Walko

EE Times

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