First Avenue (NASDAQ:FRNS)
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FiberTower Corporation, a national provider of wireless
backhaul, and First Avenue Networks Inc. (Nasdaq: FRNS), a nationwide
provider of fixed wireless transport services, today announced that
they have entered into a definitive merger agreement to combine the
two companies in an all-stock transaction valued at approximately $1.5
billion.
Under the terms of the agreement, First Avenue will issue
approximately 73.7 million of its common shares, subject to
adjustment, to the FiberTower shareholders. As a result, FiberTower
shareholders will own 51 percent of the combined entity on a fully
diluted basis.
The combined company will be named FiberTower Corporation and will
be listed on the Nasdaq Stock Market. It will emerge as one of the
nation's largest operators of wireless transport services. Both
companies today operate networks to provide backhaul - transport from
cell site to switch - for wireless carriers. The new company will have
an installed base in 12 markets with more than 1000 sites. The two
companies' networks and operations are complementary and once combined
will have minimal overlap.
"Since our founding five years ago, we have been focused on
delivering mission-critical backhaul to our customers," said Scott
Brady, CEO, FiberTower. "We have five of the leading wireless carriers
live on our network and have built a sizable customer backlog based on
the success of our networks. Combining First Avenue's spectrum assets
with our operational expertise, customer contracts and relationships
with leading tower companies, positions the merged company to increase
its speed to market and have a larger impact for our customers. This
will enable us to go deeper in our existing markets and broaden our
reach to new markets."
"This merger is about accelerating business growth and minimizing
the associated business risks," said Michael Gallagher, President and
CEO, First Avenue Networks. "The market is aggressively implementing
high capacity applications, and wireless transport is ideal for
backhauling these services. This deal puts us on the fast track to
scale the combined company on a nationwide basis. By combining the
passion, experience and assets of two leading-edge companies, we will
be able to accelerate our market impact with faster deployments and
increased market coverage. I am confident that given the strength and
balance of our combined management team we have the leadership in
place to accomplish these objectives."
Together, the two entities will have a singular focus on solving
an important business problem - backhaul. According to Craig M.
Clausen, Senior Vice President and COO, New Paradigm Resources Group,
Inc., "During the next few years a critical mass of cell sites,
enterprises and government facilities will begin migrating to high
capacity services. The movement to support enhanced network services -
via wired or wireless connectivity - is already underway."
Upon close of the merger, Michael Gallagher will become CEO of the
new entity. He brought over 22 years of telecommunications,
networking, and wireless industry experience to First Avenue Networks
when he took the helm as president and CEO in early September 2005.
The newly merged company's board of directors is to consist of five
members selected by FiberTower and three members selected by First
Avenue in addition to CEO Michael Gallagher.
Closing is subject to customary conditions, including receipt of
applicable regulatory approvals. The transaction is expected to close
by the end of the third quarter of 2006. As a result of the foregoing
uncertainties, there can be no assurance that the transaction will be
completed.
Conference Call
The management teams of both companies will host a financial
analyst and investor conference call today, May 15 at 1:00 p.m. ET
(10:00 a.m. PT). The call can be accessed at 1-800-860-2442 (U.S.) or
1-412-858-4600 (outside U.S.). A live Webcast of the call will also be
provided at www.firstavenet.com. For those unable to listen to the
live conference call, a telephone replay will be available at
1-877-344-7529 (U.S.) or 412-317-0088 (outside U.S.). Please enter
390741 when prompted for the account number followed by the # sign.
The telephone replay will be available beginning May 16, 2006 at 8:00
a.m. ET through May 23, 2006 at 4:00 p.m. ET. A Webcast archive will
also be available on First Avenue's investor relations Web site.
Additional Information and Where to Find It.
In connection with First Avenue's proposed business combination
with FiberTower, First Avenue intends to file relevant materials with
the SEC, including an information statement on Schedule 14C. Investors
and security holders are urged to read these when they become
available because they will contain important information about First
Avenue, FiberTower and the proposed transaction. The information
statement and other relevant materials (when they become available),
and any other documents filed by First Avenue with the SEC, may be
obtained free of charge at the SEC's web site at www.sec.gov. In
addition, investors and security holders may obtain free copies of the
documents filed with the SEC by contacting First Avenue by directing a
written request to: First Avenue Networks, Inc., 7925 Jones Branch
Drive, Suite 3300, McLean, Virginia 22102, Attention: Investor
Relations.
No Offer or Solicitation.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy any securities, not shall there be any
sale of securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification, or obtaining an exemption to such registration or
qualification, under the securities laws of any such jurisdiction.
About FiberTower Corporation
FiberTower Corporation, www.fibertower.com, is the first company
to recognize and treat wireless backhaul as part of a mission critical
network by delivering a service that promotes growth, scalability and
service quality in wireless networks. FiberTower delivers
groundbreaking improvements in backhaul performance and opens new
market opportunities. Wireless carriers, who recognize that their
network is the heart of their differentiation and success, now have an
alternative backhaul provider enabling them to protect and enhance
their brands and reputations built on a superior network.
About First Avenue Networks
First Avenue Networks (NASDAQ: FRNS) is a leader in delivering
wireless transport services to cellular carriers, service providers
and government suppliers and agencies. First Avenue provides wireless
backhaul and Carrier Ethernet services over its licensed spectrum
footprint, which includes nationwide 24 GHz and 39 GHz holdings. For
further details, visit www.firstavenet.com or call (703) 864 4165.
Forward Looking Statements
Statements included in this news release which are not historical
in nature are "forward-looking statements" within the meaning of
Section 21E of the U.S. Securities Exchange Act of 1934 and the U.S.
Private Securities Litigation Reform Act of 1995. Forward looking
statements relate to expectations, beliefs, projections, future plans
and strategies, anticipated events or trends and similar expressions
concerning matters that are not historical facts. These include,
without limitation, statements regarding expected benefits and value
of the contemplated merger, increased demand for the services,
strategy, forecasts of revenues, earnings estimates, statements
regarding contracts, work or revenue opportunities that may be secured
in the future, and related information, all of which are based on
current factual information and certain assumptions about future
events which management believes to be reasonable at this time.
There are many risks, uncertainties and other factors that can
prevent the achievement of goals or cause results to differ materially
from those expressed or implied by these forward-looking statements
including, without limitation, the proposed transaction not being
consummated, anticipated synergies from the proposed transaction not
being achieved, inherent risks of integrating two companies, changes
in demand for services from external factors including general
economic conditions or changes in wireless demand or technology
affecting network expansion strategies at and financing opportunities
for wireless carriers and other customers, delays in the award of new
work, the termination or reduction of existing projects due to changes
in the financial condition or business strategies of the wireless
carriers and other customers, dependence on hiring and retaining
professional staff and key personnel, fluctuations in quarterly
results from a variety of internal and external factors including
changes in the estimates with respect to the completion of fixed-price
contracts, lengthy sales cycles especially with respect to larger
contracts that may account for a significant portion of the
anticipated revenues, intense competition in the marketplace
especially from competitors with greater financial resources and
financing capabilities, and those risk factors described in First
Avenue's filings with the Securities and Exchange Commission,
including its most recent Annual Report on Form 10-K and Quarterly
Reports on Form 10-Q.