GigOptix to expand into wireless with Endwave acquisition
GigOptix, Inc. (OTCBB: GGOX) plans to add wireless products to its chip portfolio via the acquisition of RF semiconductor company Endwave Corp. (NASDAQ: ENWV). The optical communications device vendor announced today it has signed a definitive agreement to merge with Endwave -- a provider of high-frequency RF products for the wireless mobile backhaul communications, satellite communications, electronic instruments, and defense and security markets -- in a deal expected to close in the second quarter of this year.
GigOptix, Inc. (OTCBB: GGOX) plans to add wireless products to its chip portfolio via the acquisition of RF semiconductor company Endwave Corp. (NASDAQ: ENWV). The optical communications device vendor announced today it has signed a definitive agreement to merge with Endwave -- a provider of high-frequency RF products for the wireless mobile backhaul communications, satellite communications, electronic instruments, and defense and security markets -- in an all-stock transaction expected to close in the second quarter of this year. The combined company will retain the name GigOptix.
The merger agreement calls for all outstanding shares of Endwave common stock, including those issuable upon settlement of outstanding restricted stock units, and outstanding in-the-money Endwave stock options, to be converted into shares of GigOptix common stock. Immediately after the merger, these shares will represent approximately 42.5% of all outstanding GigOptix common stock. Based on the number of shares of Endwave and GigOptix common stock outstanding as of January 31, 2011, approximately 9.1 million shares of GigOptix common stock will be issued to holders of Endwave common stock, registered stock units and stock options.
The issuance of shares will be made pursuant to an effective Registration Statement on Form S-4 to be filed shortly with the Securities and Exchange Commission. GigOptix will continue its best efforts to list GigOptix common stock on NYSE Amex or another national securities exchange.
GigOptix management expects to have an estimated post-merger consolidated cash position of about $16 million after payment of closing expenses and severance. In addition they expect to realize operational cost savings beginning in 2011, reaching approximately $1 million per quarter in 2012;
"I am very excited about the strategic merger of GigOptix and Endwave. Once complete, the combined company will be well positioned to be a leader in high-speed communication components. We are set to offer solutions to both the optical and microwave RF front ends that will drive continued growth and bring added value to our customers and stockholders," commented Dr. Avi Katz, GigOptix's chairman of the board of directors and CEO. "Responding to the core issue of increasing bandwidth to meet customer demand has shaped the technology advancements for both companies. By combining Endwave's extensive point to point microwave radio system knowledge and Monolithic Microwave IC (MMIC) product portfolio with GigOptix's portfolio of optical modulators and broadband amplifiers, it positions us to not only expand our market opportunities, but also enables us to increase our penetration of the existing customer bases and market segments. The combined company will be able to leverage Endwave's manufacturing and GigOptix's high speed fiber-optic front-end technology to provide cutting-edge solutions for next generation 100G and 400G drivers and electro-optic subsystems."
Dr. Katz will maintain his positions as chairman of the board of directors, CEO, and president of the combined company. Curt P. Sacks, the current CFO of Endwave, will serve in the same capacity within the combined company. GigOptix CTO Andrea Betti-Berutto will retain his position as well. Other unspecified “key executives” from both companies will serve on the management team. GigOptix's new board of directors will consist of all five existing GigOptix directors and two directors that will be recommended by the Endwave board of directors, subject to the approval of the GigOptix chairman of the board, one of which will be John Mikulsky, Endwave's president and CEO.