FIRST AVENUE NETWORKS TO ACQUIRE TELIGENT

First Avenue Networks, a spectrum leasing firm, has signed a letter of intent to acquire Teligent, the one-time broadband wireless juggernaut that has been trying to make another go of it in a newly optimistic broadband wireless era.

The potential deal, a $99 million all-stock transaction, would combine First Avenue Network's 39 GHz spectrum holdings with Teligent's assets in the 24 GHz band, which promises better propagation for point-to-multipoint equipment, according to Dean Johnson, president and CEO of First Avenue Networks. Lack of equipment availability was one of the factors in Teligent's bankruptcy a few years ago, but Johnson said that is no longer the case.

“We have been approached by a company that wants to deploy point-to-multipoint, but is looking for the 24 GHz spectrum to do it. We believe the equipment is out there and available from credible sources that might not be the same old broadband wireless vendors,” Johnson said.

With the addition of Teligent's spectrum, First Avenue Networks would have an average of 580 MHz in each of the top 50 markets nationwide. Johnson acknowledged that staggering figure, but said the market demand in each of the company's application areas is growing rapidly, and the emergence of 802.16 WiMAX technology promises even more growth.

First Avenue Networks plans to complete its due diligence on the proposed deal in the next two to four weeks. However, because the deal requires FCC approval, it may not close until the fourth quarter.

In addition to spectrum assets, Teligent has 41 employees and other divisions and assets, but First Avenue has yet to decide their future. Teligent CEO Jim Continenza and Chief Financial Officer Bill Marshall have resigned from the company, according to Johnson.

The deal was driven in part by Teligent co-founder Raj Singh. Though Singh resigned from Teligent's board of directors a few years ago, he had been consulting with the company recently and saw the potential for the two groups to merge their spectrum resources, Johnson said. Singh will join the board at First Avenue Networks and, assuming the Teligent deal goes through, will have an equity position in the combined entity.