Table of Contents
1) Nokia Siemens Networks – Background 3
2) Alvarion – Background 4
3) Data Explosion, Mobile Offload & Carrier-Grade Wi-Fi 6
4) Motivation for Acquisition 8
5) Alvarion evaluation 10
a) Alvarion stand-alone valuation 10
b) Alvarion-NSN Synergy valuation 11
c) Pricings: 13
6) Probability for success - Bidding side 14
7) Probability for success - Integration side 15
8) Post-Merger Integration 16
a) R&D - PRESERVATION. 17
b) Customer Base –SYMBIOSIS. 17
c) Additional aspects of the integration: 18
Appendix A: Alvarion's 2012 financial report 19
Appendix B: M&A revenue ...view middle of the document...
” In the announcement Rajeev Suri clearly stated that NSN believes that the future of the industry is in mobile broadband and services – and that the company aims to be an undisputed leader in these areas.
The announcement also referenced a restructuring process, including three aspects:
1) Nokia Siemens Networks will target end-to-end mobile network infrastructure and services, with a particular emphasis on mobile broadband. 2) Significant operating expense and production overhead savings. 3) Global workforce reduction of approximately 17,000.
2) Alvarion – Background
Alvarion Ltd. is a 4G communications company. The company manufactures and exports a range of network solutions, including WiMAX, IEEE, PtMP, TD-LTE and WiFi to service providers and enterprises, covering a variety of industries such as mobile broadband, residential and business broadband, utilities, municipalities and public safety agencies. Alvarion was originally incorporated as BreezeCOM Ltd. in September, 1992. In August 2001, BreezeCOM merged with another Israeli company, Floware Wireless Systems Ltd., which was founded in 1993, changing its name to Alvarion.
In July 2003 Alvarion signed a strategic partnership agreement with Intel to co-develop WiMAX based Broadband wireless access systems, using Intel’s WiMAX chips.
Throughout the years, Alvarion focused on WiMAX Technology, by which Mobile communications companies can establish 4G networks, with data transmission abilities substantially higher than the current 3G networks. During the last decade there has been a fierce competition between the WiMAX technology to "LTE" technology over the lead in future 4G networks. During these years Alvarion established dozens of networks for mobile operators and sold equipment valued at several hundred millions of dollars. In recent years LTE technology captured the leading position and Alvarion started losing money. The company's market value of $2.9B, the company's market value has reached under $18M.
Among other acquisitions, in November 2011, Alvarion acquired Wavion for $28.4M. Wavion is a provider of outdoor Wi-Fi applications (Carrier-Grade) for metro and rural areas with deployments in more than 75 countries. This acquisition is part of Alvarion’s strategic plan for shifting its primary focus from WiMAX-based RAN solutions to becoming a multi-technology wireless broadband solution provider.
Following the acquisition Alvarion focused on three main solutions:
* Wireless Broadband Access – WiMAX based solutions for establishment of mobile networks.
* Vertical Markets – WiMAX or CG Wi-Fi solutions for establishment of private telecommunications network for customers in vertical markets.
* Carrier-Grade Wi-Fi - CG Wi-Fi solutions for establishment of Mobile networks (the basis for this suggested acquisition).
Alvarion sold the mobile networks telecommunications solution on its own and used a network of local and global distributers for vertical markets...