BreezeCOM, Floware merge

(Telephony) In what the companies are terming a “merger of equals,” Israel-based broadband wireless equipment makers Floware Wireless Systems and BreezeCOM have announced plans to merger.

Under the terms of the agreement, each ordinary share of Floware stock will be converted into 0.767 ordinary shares of BreezeCOM stock, valued at $6 per share at yesterday’s closing. The combined company, which will be given a new name, will have about 53.5 million outstanding shares, with BreezeCOM shareholders owning about 55% and Floware 45%.

Lending credibility to the “merger of equals” statement, leadership of the merged entity will be divided between the heads of BreezeCOM and Floware.

BreezeCOM’s President and CEO Zvi Slonimski will become co-CEO of the new company, focusing on sales, research and development. Amnon Yacoby, CEO of Floware, will be the other co-CEO, focusing on business development, strategy, marketing, and financial market issues.

According to Slonimski, the merger will create, “a one-stop shop solution provider with the broadest range of products for all point-to-multipoint needs and market segments. BreezeCom products target residential, SOHO and enterprise markets and are sold to a broad range of service providers. Floware products target telecom carriers who serve small and medium-sized enterprises and multitenant units.”

In addition to product synergies, the two companies serve complementary markets, said Slonimski. BreezeCOM currently has a strong presence in North America, Scandinavia and Eastern Europe, while Floware is strong in Germany, Spain, Portugal and other European countries. Both are working to establish themselves in Asia and Latin America.

Despite the synergies, the companies are being cautious in the financial guidance they are providing.

“As a combined company, we believe that we will have revenues for 2001 of approximately $190 million to $200 million,” said Yacoby. “You may note that this number is lower than the combination of BreezeCOM’s and Floware’s current street expectations…We believe it is wise to take a conservative approach in forecasting sales for the new company for the remainder of the year. Obviously, we have noted the current uncertainty in telecom spending given the recent slowdown in the U.S. and the potential spillover affect into Europe.”