Friday, December 18, 2009

Airvana to go private in $530M cash buyout

By Rodney H. Brown

Airvana Inc. of Chelmsford will be acquired by a newly formed company called 72 Mobile Holdings LLC created by a group of capital investment firms, in a deal worth approximately $530 million. That sale will take Airvana out of the public markets, where it currently trades on the Nasdaq.

A group comprised of S.A.C. Private Capital Group LLC, GSO Capital Partners LP, Sankaty Advisors LLC, ZelnickMedia and their affiliates have agreed to pay $7.65 in cash for each share of mobile network products maker Airvana (Nasdaq: AIRV). According to Airvana officials, Randy Battat, president and CEO, and founders Vedat Eyuboglu and Sanjeev Verma, will exchange some of their shares in Airvana for an equity interest in the acquirer 72 Mobile.

After the deal has closed, which is expected to happen by the end of the first quarter of 2010, Merle Gilmore, former president of Motorola’s communications enterprise unit, will serve as chairman of the company.

The sale has already been unanimously approved by Airvana’s board of directors — with Battat and Verma abstaining — and by a special committee of independent directors. The deal still needs approval of Airvana’s shareholders and needs to meet regulatory conditions.

The coalition of buyers has said Airvana will concentrate on its EV-DO software and its femtocell products after the sale. Airvana officials say its products are used in more than 70 commercial networks on six continents.

Airvana, which reports 555 employees, has a market capitalization of $390 million. For 2008, the company made $21 million on revenue of $138 million.