05.15.2005
First Avenue, FiberTower To Merge in Stock Swap
First Avenue Networks Inc. agreed to merge with FiberTower Corp., a closely-held provider of wireless networking gear, in a stock swap initially worth $712 million.
Under the terms of the deal, First Avenue will issue about 73.7 million shares to FiberTower for a 49% stake in the combined firm. Based on Friday's closing price on the Nasdaq Stock Market, the First Avenue shares are worth about $712 million.
The resulting company will be called FiberTower. It will be 51% owned by FiberTower investors, who will also appoint five of its nine board members. Michael Gallagher, chief executive of First Networks, will be chief executive of the new company.
San Francisco-based FiberTower makes wireless infrastructure equipment for cellular towers. It has raised more than $200 million in venture capital and its principal backers include cell tower owners, American Tower Corp. and Crown Castle International Inc.
First Avenue, which filed for bankruptcy in 2001 and was purchased by private investors, leases wireless spectrum and provides other services to wireless companies. Last year, it acquired the assets of Teligent Inc., a former highflying rival that filed for bankruptcy in 2001. The McLean, Va., company reported a loss of $11.3 million on revenue of $1.3 million in 2005.
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