Alvarion seeks OK of $1.5M buyout offer, patents still up for grabs

Alvarion's court-appointed receiver asked the District Court of Tel Aviv-Yaffo to approve the company's acquisition by Valley Telecom for $1.5 million plus milestone payments of at least $1.8 million payable within one year.

The acquisition excludes Alvarion's patents, which the receiver will continue to try selling separately. Alvarion said Wi-LAN has offered to acquire its patents for $600,000.

Globes described Valley Telecom as a consortium that includes east Jerusalem businessman Hanni al-Alami, high-tech entrepreneur Jorge Pinievsky and businessman Peleg Hadar. It said the company wants to keep Alvarion in business, retain its employees and pay its current debts.

A total of four offers for Alvarion were submitted during the bidding process. According to Globes, other bidders included Sigma Wave, a private Caesarea, Israel-based company controlled by Arie Trabels and Radwin, which already operates in fields that complement those of Alvarion.

Yoav Kfir, the court-appointed receiver, asked the court to  approve Valley Telecom's offer or else schedule an emergency hearing on the matter for Aug. 29. The company's operating plan is scheduled to expire Aug. 30.

As part of Valley Telecom's offer, additional payments above the guaranteed $1.8 million will be received, subject to the sale by Valley Telecom of the company's existing inventory and the collection of accounts receivables, Alvarion said. The company added that Kfir expects the value of these assets, and consequently the milestone payments to be received from Valley Telecom, to exceed the minimum agreed payment of $1.8 million.

Separately, Valley Telecom offered to pay $500,000 for newly issued shares representing 75 percent of the company's outstanding ordinary shares. The receiver is expected to receive newly issued shares representing 15 percent of the company's outstanding ordinary shares, while the company's existing ordinary shares, which number about 9.3 million shares, will be diluted to represent 10 percent of the company's outstanding ordinary shares.

Kfir estimates that the offers on the table will enable the repayment of about half of Alvarion's existing debt, which amounts to some $23 million.

Alvarion, based in Rosh Hayain, Israel, was an early pioneer in WiMAX technology but struggled as mobile operators began adopting LTE rather than WiMAX for broadband services. The company diversified into other businesses such as distributed antenna systems (DAS) and Wi-Fi, the latter stemming from its November 2011 purchase of Wi-Fi equipment vendor Wavion.

Earlier this year, Alvarion sold its WiMAX business to network vendor Telrad Networks for $6.1 million plus certain performance-based milestone payments of up to $6 million.

For more:
- see this Alvarion release
- see this Globes article

Related article:
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All Alvarion employees given layoff notices
Alvarion sells WiMAX business to Telrad for $6.1M