Increased consideration would include
$2.80 per share in cash and
$0.28 in equity consideration of
Aviat stock, providing a premium of 47% to closing price of Ceragon
shares on June 27, 2022
Combination of cash and equity consideration
provides balance of immediate and long-term value, allowing
shareholders of both Aviat and Ceragon to benefit from the
considerable value creation potential of the combined
company
New website ValueForCeragon.com
provides information about what's at stake and the slate of
highly qualified independent directors who will ensure Ceragon
pursues opportunities to create value
AUSTIN,
Texas, Aug. 2, 2022 /PRNewswire/ -- Aviat
Networks, Inc. (NASDAQ: AVNW) ("Aviat"), the leading expert in
wireless transport solutions, today announced it has submitted a
revised nonbinding proposal ("Revised Proposal") to acquire all the
outstanding shares of Ceragon Networks Ltd. (NASDAQ: CRNT)
("Ceragon") to the Ceragon Board. The Revised Proposal provides
even greater value than Aviat's June 27,
2022 proposal and is structured to maximize value and
certainty for Ceragon and its shareholders, and to address the
requests Ceragon shareholders have made for an opportunity to
benefit from the value the combined company will provide. Aviat
also announced the launch of a new website, ValueforCeragon.com,
which provides information about what is at stake for Ceragon
shareholders.
Under the terms of the Revised Proposal, which was delivered to
Ceragon's Chief Executive Officer today, Ceragon shareholders would
receive $2.80 per share in cash and
$0.28 in equity consideration of
Aviat stock. The combination of cash and equity consideration
provides a balance of immediate and long-term value, allowing
shareholders of both Aviat and Ceragon to benefit from the
significant upside of the combined company. This proposal
represents a substantial premium of 47% to the closing price of
Ceragon shares on June 27, 2022 of
$2.09 (the last close price prior to
Aviat's first public offer) and a 64% premium to Ceragon's 60-day
volume-weighted average share price of $1.88.
"Since we publicly announced our proposal to acquire Ceragon on
June 27, 2022, we have spoken with
Wall Street analysts and many Ceragon shareholders, who have
recognized the compelling strategic logic of such a combination,"
said Aviat President and CEO Peter
Smith. "In addition to offering immediate and certain value
to Ceragon shareholders, our transaction will create significant
synergy opportunities, and provide the combined company with the
scale and reach to innovate more, expand revenue opportunities, and
enhance addressable market capture. Ceragon shareholders have told
us clearly that they would also like to benefit from the
combination over time. We have addressed this in our revised
proposal through the addition of an equity component, which
provides Ceragon shareholders with a compelling opportunity for
both near and long-term value creation.
"We remain committed to consummating a transaction with Ceragon
and taking all the necessary steps to make that happen. Despite the
disappointing quarterly results recently announced by Ceragon,
which marked the company's sixth consecutive quarter of negative
free cash flow, we continue to see value in a combination, and
remain committed to doing everything possible to make that happen.
We have revised our proposal to provide greater value to Ceragon
shareholders and believe they – and Ceragon's Board – will be
receptive to our revised proposal."
Ceragon shareholders can visit ValueforCeragon.com for greater
detail on the benefits of the proposed transaction, the
deficiencies of Ceragon's existing stand-alone strategy, the
tremendous value destruction overseen by Ceragon's current Board,
and the qualifications of Aviat's five highly qualified Board
nominees.
The full text of the letter delivered to Ceragon on August 2, 2022 is included below:
August 2, 2022
Mr. Zohar Zisapel, Chairman of the Board
Mr. Doron Arazi, Chief Executive
Officer
Ceragon Networks Ltd.
24 Raoul Wallenberg Street
Tel-Aviv 69719, Israel
Dear Messrs. Zisapel and Arazi:
As a follow-up to our conversation earlier today and based on
feedback we received from Ceragon shareholders, Aviat is hereby
increasing its offer for all of the outstanding shares of Ceragon
to $3.08 per share, consisting of
$2.80 in cash and $0.28 in equity consideration of Aviat stock (the
"Revised Proposal"). We believe the Revised Proposal represents a
compelling and full value proposition to Ceragon shareholders as it
represents a 64% premium to Ceragon's 60-day volume-weighted
average share price of $1.88 and a
47% premium to Ceragon shareholders based on the closing price on
June 27, 2022 of $2.09 (the last closing price prior to our public
offer). Moreover, the stock component of our proposal will permit
your shareholders to share in the synergies of the combination of
our two companies.
We intend to finance the transaction with cash on hand and bank
debt. We have re-confirmed with our potential financing sources
that each is highly confident in our ability to obtain debt
financing at this level. Upon completion of due diligence and
drafting the mutually acceptable definitive agreement, which we
believe can be accomplished prior to the date of the Ceragon
extraordinary general meeting, we would procure binding commitment
letters for the full debt financing.
As with our original proposal, the consummation of the
transaction is subject to the approval of Ceragon's shareholders,
customary regulatory approvals and other standard conditions. The
consummation of the transaction would not be subject to any
financing condition. No binding obligation or commitment for either
of us will arise with respect to this Revised Proposal or any
transaction until we have executed a mutually agreeable definitive
agreement.
We remain very enthusiastic about a combination of Aviat and
Ceragon and will immediately commit the resources to expeditiously
move forward. Please do not hesitate to call me if you have any
questions.
Sincerely,
Peter Smith
Aviat Networks
President and Chief Executive Officer
About Aviat Networks,
Inc.
Aviat Networks, Inc. is the leading expert in wireless transport
solutions and works to provide dependable products, services and
support to its customers. With more than one million systems sold
into 170 countries worldwide, communications service providers and
private network operators including state/local government,
utility, federal government and defense organizations trust Aviat
with their critical applications. Coupled with a long history of
microwave innovations, Aviat provides a comprehensive suite of
localized professional and support services enabling customers to
drastically simplify both their networks and their lives. For more
than 70 years, the experts at Aviat have delivered high-performance
products, simplified operations, and the best overall customer
experience. Aviat Networks is headquartered in Austin, Texas. For more information, visit
www.aviatnetworks.com or connect with Aviat Networks on
Twitter, Facebook and LinkedIn.
Forward-Looking
Statements
The information contained in this document includes
forward-looking statements within the meaning of the safe harbor
provisions of the U.S. Private Securities Litigation Reform Act of
1995. Such statements include, without limitations, statements
regarding the proposed transaction between Aviat and Ceragon, the
results of the requested extraordinary general meeting of
shareholders of Ceragon, Ceragon's actions in connection therewith,
and any potential related litigation. All statements, trend
analyses and other information contained herein regarding the
foregoing beliefs and expectations, as well as about the markets
for the services and products of Aviat and trends in revenue, and
other statements identified by the use of forward-looking
terminology, including, without limitation, "anticipate,"
"believe," "plan," "estimate," "expect," "goal," "will," "see,"
"continue," "delivering," "view," and "intend," or the negative of
these terms or other similar expressions, constitute
forward-looking statements. Forward-looking statements are neither
historical facts nor assurances of future performance. Instead,
forward-looking statements are based on estimates reflecting the
current beliefs, expectations and assumptions of the senior
management of Aviat regarding the future of its business, future
plans and strategies, projections, anticipated events and trends,
the economy and other future conditions. Such forward-looking
statements involve a number of risks and uncertainties that could
cause actual results to differ materially from those suggested by
the forward-looking statements. Forward-looking statements should
therefore be considered in light of various important factors,
including those set forth in this document. Therefore, you should
not rely on any of these forward-looking statements. Important
factors that could cause actual results to differ materially from
estimates or projections contained in the forward-looking
statements include the following:
- the impact of COVID-19 on our business, operations and cash
flows;
- continued price and margin erosion as a result of increased
competition in the microwave transmission industry;
- our ability to realize the anticipated benefits of any proposed
or recent acquisitions, including our proposed transaction with
Ceragon, within the anticipated timeframe or at all, including the
risk that proposed or recent acquisitions will not be integrated
successfully;
- the results of the extraordinary general meeting of Ceragon's
shareholders;
- the impact of the volume, timing, and customer, product, and
geographic mix of our product orders;
- the timing of our receipt of payment for products or services
from our customers;
- our ability to meet projected new product development dates or
anticipated cost reductions of new products;
- our suppliers' inability to perform and deliver on time as a
result of their financial condition, component shortages, the
effects of COVID-19 or other supply chain constraints;
- the effects of inflation and the timing and extent of changes
in the prices and overall demand for and availability of our
inputs;
- customer acceptance of new products;
- the ability of our subcontractors to timely perform;
- weakness in the global economy affecting customer spending;
- retention of our key personnel;
- our ability to manage and maintain key customer
relationships;
- uncertain economic conditions in the telecommunications sector
combined with operator and supplier consolidation;
- our failure to protect our Intellectual property rights or
defend against Intellectual property infringement claims by
others;
- the results of our restructuring efforts;
- the ability to preserve and use our net operating loss
carryforwards;
- the effects of currency and interest rate risks;
- the effects of current and future government regulations,
including the effects of current restrictions on various commercial
and economic activities in response to the COVID-19 pandemic;
- general economic conditions, including uncertainty regarding
the timing, pace and extent of an economic recovery in the United States and other countries where we
conduct business;
- the conduct of unethical business practices in developing
countries;
- the impact of political turmoil in countries where we have
significant business;
- the impact of tariffs, the adoption of trade restrictions
affecting our products or suppliers, a United States withdrawal from or significant
renegotiation of trade agreements, the occurrence of trade wars,
the closing of border crossings, and other changes in trade
regulations or relationships; and
- Aviat's ability to implement our stock repurchase program or
the extent to which it enhances long-term stockholder value.
For more information regarding the risks and uncertainties for
Aviat's business, see "Risk Factors" in Aviat's Annual Report on
Form 10-K filed with the U.S. Securities and Exchange Commission
("SEC") on August 25, 2021 as well as
other reports filed by Aviat with the SEC from time to time. Aviat
does not undertake any obligation to update publicly any
forward-looking statement, whether written or oral, for any reason,
except as required by law, even as new information becomes
available or other events occur in the future.
Additional
Information
This document does not constitute an offer to sell or exchange,
or the solicitation of an offer to buy or exchange, any securities,
nor will there be any sale of securities in any states or
jurisdictions in which such offer or sale or exchange would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of securities
will be made except by means of a prospectus meeting the
requirements of section 10 of the Securities Act of 1933 or an
exemption therefrom.
In connection with any transaction between Aviat and Ceragon
that involves the issuance of Aviat shares to the Ceragon
shareholders, Aviat will file a registration statement with the
SEC. INVESTORS ARE URGED TO READ THE REGISTRATION STATEMENT, ANY
AMENDMENTS THERETO AND OTHER RELEVANT DOCUMENTS THAT MAY BE FILED
WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
TRANSACTION. Investors will also be able to obtain copies of the
registration statement and other documents containing important
information about each of the companies once such documents are
filed with the SEC, without charge, at the SEC's web site at
www.sec.gov.
Investor Contacts
Aviat Networks
Andrew Fredrickson
+1-408-501-6214
andrew.fredrickson@aviatnet.com
Okapi Partners LLC
Bruce Goldfarb / Chuck Garske / Teresa
Huang
+1-212-297-0720
info@okapipartners.com
Media Contact
Abernathy
MacGregor
Sydney Isaacs / Jeremy Jacobs
+1-212-371-5999
sri@abmac.com / jrj@abmac.com
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SOURCE Aviat Networks, Inc.