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Ceragon Networks to acquire Siklu

Ceragon Networks Ltd. announced that it has entered into a definitive agreement to acquire Siklu, a provider of multi-Gigabit “wireless fiber” connectivity in urban, suburban and rural areas, for an enterprise value of $13-15 million. As consideration to Siklu’s shareholders, Ceragon will issue approximately 1.5 million ordinary shares. Ceragon is expected to assume financial liabilities of approximately $10-12 million, of which approximately $2.5 million are classified as long-term debt.

Ceragon is expected to generate approximately $25-$29 million in incremental 2024 revenue from this acquisition. The acquisition is expected to be accretive to the consolidated gross margins of Ceragon as Siklu’s margins are at levels significantly higher than Ceragon’s historical margins. Ceragon management expects the combination to improve Siklu’s results by leveraging Ceragon’s working capital management capabilities, as well as expanded profitability following synergies. Inclusive of these business improvements, management anticipates the transaction to be accretive to non-GAAP earnings by the second half of 2024.

Doron Arazi, Ceragon CEO, said “We expect this combination to accelerate our growth strategy, by improving our key financial metrics and reducing customer concentration in the short and long run. We have identified near-term opportunities to bring Siklu products to regions and customers where Ceragon has an established presence, and, for the longer term, to combine Ceragon products to create a more comprehensive offering primarily to private networks and small service providers in general, and leveraging Siklu’s millimeter-wave leadership position in North America to increase our presence in this key market in particular.”

“In addition to increasing our market share in the millimeter wave bands, which is anticipated to be the growth segment within wireless transport market in the coming years, this acquisition is expected to provide us with an entry point to PtMP technology in general and Fixed Wireless Access in particular,” added Mr. Arazi.

As part of this transaction, Ceragon will expand its total loan credit facility by $5 million to $77 million total, and Siklu’s primary lender will join Ceragon’s lending consortium.

Operating in the millimeter wave bands since 2008, Siklu’s wireless solutions have been used by service providers (primarily small ones), Private Networks and system integrators for many years for providing Wireless Transport and Access solutions. Siklu has deployed over 300,000 outdoor antenna units to date in over 50 countries. Siklu has been the leader in market share of E-band installations in the US for the last three years. The Company has approximately 60 employees globally, including deep technical expertise in radio frequency communications and PtMP technology. Siklu is known in the industry for rapid deployments, ease of use solutions, robust testing capabilities and innovation, traits that align well with Ceragon.

“Siklu has built an impressive team, with deep technical expertise and an enviable corporate culture, along with industry leading technology in the markets it serves,” added Arazi.

Mr. Ronen Ben Hamou, Siklu’s CEO, added, “We see Ceragon as the perfect partner for Siklu, in both technology, market, and cultural fit.”

The closing of the transaction is subject to customary closing conditions. Ceragon expects the deal to close by the end of 2023.

CT Bureau

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