05.16.2005
First Avenue Agrees To Join FiberTower
First Avenue Networks Inc. and FiberTower Corp. agreed to combine in a $2.14 billion stock transaction.
First Avenue, a McLean, Va., provider of fixed wireless transport services, will issue about 73.7 million of its common shares to FiberTower, which will own 51% of the combined entity. FiberTower is a closely held provider of wireless backhaul networking equipment based in San Francisco.
Backhaul is the line between the cellular tower and the central office. Wireless carriers typically use the existing copper or fiber lines laid underground for backhaul transport, but there has been growing interest in using alternative technologies, such as FiberTower and First Avenue's microwave antenna systems, as more traffic travels through the network.
While their businesses are similar, both companies insist there is little overlap. FiberTower mainly deals with the suburban and rural markets, while First Avenue addresses the urban and metropolitan market. In the one market they share, New York, First Avenue works in the downtown Manhattan area, while FiberTower serves other boroughs such as Brooklyn.
First Avenue President and Chief Executive Michael Gallagher will become CEO of the new company, which will be called FiberTower Corp. First Avenue shares were up $3.85, or 40%, at $13.51 as of 4 p.m. in Nasdaq Stock Market composite trading.
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