Here's another piece on the acquisition. Multex shows EPS to be .21 for FY2001, which would give WMUX a PE of 43 and a PEG of only .48. But I'm not sure how this acquistion would affect EPS estimates for 2001...
Western Multiplex: The End-to-End Solution
---------------------
November 14, 2000 - Cellular One has a network that covers more than 20
sites -
across most of southwestern Colorado. However, the company faced a big
problem; that is, much of the land is vertical. In other words, there are
many
mountains, ravines and valleys.
But there was a solution: Western Multiplex. The company's products were
able to effectively spread the radio spectrum.
Western Multiplex (NASDAQ:WMUX) is a leader in broadband fixed
wireless systems. The company has demonstrated strong growth. In the
past quarter, revenues were $29.9 million, which was a 152.7 percent
increase from the same period a year ago. The company is even
profitable, with net income of $1.7 million.
Here's a look at the company's main products:
Tsunami: This is a suite of wireless Ethernet bridges, which work across
licensed and license-free connections. It is a strong solution for wide-area
networks. The Fast Ethernet models allow for simultaneous wireless
connections for PBX and video conferencing equipment.
LYNX Spread Spectrum Radio: This provides for unlicensed wireless
interconnect solutions for a variety of telecom interfaces. They operate in
the 2.4 and 5.8 GHz ISM bands and also the 5.8 GHz UNII band.
Yesterday, the company announced an acquisition of Adaptive
Broadband (NASDAQ:ADAP). Like so many other acquisitions,
Western Multiplex saw its stock price tumble. It was down $3-3/4 to $9.
The acquisition is a bold move and critical. It will help consolidate the
fast-growing broadband fixed wireless marketplace. While Western
Multiplex develops products that transmit from fiber networks to phone
carriers and ISPs, Adaptive has products that transmit data from ISPs to
homes and offices. Thus, the new entity will be a end-to-end solution for
customers.
In terms of the financials, Adaptive has been a strong performer. In the
past quarter, revenues were $24.2 million, a 42 percent sequential
increase. The order backlog is $72.4 million and there is $120 million in
the bank.
By all accounts, the merger looks like a classic example of synergy. And
with both companies growing at a rapid rate, the recent fall in the stock
price of Western Multiplex looks like a good opportunity. |
