Aviat Networks proposes to acquire Ceragon Networks

Aviat Networks, Inc. the leading expert in wireless transport solutions, announced it has submitted a nonbinding proposal to acquire all the outstanding shares of Ceragon Networks Ltd. that it does not already own for $2.80 per share in cash. Aviat holds more than 5% of Ceragon’s outstanding shares as of June 24, 2022, making it Ceragon’s third largest shareholder.

Under the terms of the proposal, which was delivered to Ceragon’s Board of Directors, Ceragon shareholders would receive $2.80 per share in cash, providing them with immediate and certain value. Aviat also remains open to offering a portion of the consideration in Aviat stock to allow shareholders the opportunity to participate in the significant upside of the combined company. The proposal represents a substantial premium of 34% to the closing price of Ceragon shares on June 27, 2022 and a 51% premium to the 60-day volume weighted average trading price of Ceragon shares as of June 24, 2022.

“Over the past year, we have sought to engage on numerous occasions with Ceragon’s Board and management team to negotiate terms for a transaction that we are confident would deliver meaningful near- and long-term value for shareholders of both companies,” said Aviat President and CEO Peter Smith. “We have twice attempted to reasonably address concerns voiced by Ceragon, and have met only with delay and rejection. Along with Aviat’s Chairman, I traveled to Israel last week to meet in person with Ceragon’s Chairman, CEO, and a member of its Board. They refused to engage with us in constructive discussions, instead making further demands for unorthodox and off-market provisions that seem intended only to delay, leaving us with no other option but to make Ceragon shareholders aware of our proposal.”

Aviat Chairman, John Mutch emphasized, “Our Board of Directors has spent considerable time analyzing the benefits of this combination and is unanimous in its belief that such a transaction has clear strategic and financial merits and creates a compelling opportunity to deliver meaningful near- and long-term value.”

Benefits of the transaction

We believe the combination of Aviat and Ceragon will create a leading global wireless transport specialist that is more efficient and competitive, and better positioned to provide greater innovation and service to their complementary customer bases.

• The overlap in portfolio and roadmap developments and different areas of technology leadership mean the combined company will experience significant cost reductions and an enhanced value proposition, with increased volume to leverage in operations and supply chain.
• Aviat expects to realize approximately $35 million of cost synergies from identified SG&A and operational synergies.
• By combining the companies’ innovative technologies and building scale, the combined company will also be positioned for revenue growth opportunities and benefit from improved purchasing power in the growing wireless transport solutions market.
• Aviat and Ceragon have complementary product roadmaps, which will enable greater innovation, expand revenue opportunities and enhance addressable market capture. The combined company will have lower R&D costs and greater capabilities to strengthen its technology leadership and compete effectively with generalists across all markets and verticals, with a stronger foundation for diverse growth.
• Aviat and Ceragon customers will benefit from access to a wider array of best-in-class hardware and software solutions in more geographic locations. Existing and prospective customers will also benefit from the combined company’s enhanced R&D capabilities and product innovation, with Aviat and Ceragon offering a highly attractive integrated value proposition.

Smith added, “As an industry leader and innovator with a strong track record of delivering significant value to our shareholders and premium service to our customers, we strongly believe in the value this transaction would create and look forward to giving Ceragon shareholders the opportunity to benefit from this combination. We believe they will recognize that our proposal provides compelling, immediate and certain value, substantially in excess of the value that would be generated for Ceragon shareholders if Ceragon were to remain a stand-alone entity. Although we very much prefer to negotiate a transaction with Ceragon on a friendly basis, we are prepared to take all steps necessary to pursue this transaction.”

As announced in a separate press release today, as the holder of over 5% of Ceragon’s shares, Aviat has called for an extraordinary general meeting of Ceragon shareholders for the purpose of increasing the size of the Ceragon board, removing three of Ceragon’s current directors, and electing independent, well-qualified new board leadership that would evaluate fairly the proposal and negotiate for the best outcome for Ceragon’s shareholders.

CT Bureau