The remnants of technology company Alvarion Ltd. (Nasdaq: ALVR; TASE: ALVR), formerly one of Israel's leading high-tech companies, are being sold to SuperCom Inc. (Nasdaq: SPCB) for only $2 million. When Alvarion was in liquidation in 2013, its assets were sold to Jorge Pinievsky's private company, Valley Telecom, for $38 million.
Competing against Valley Telecom three years ago for the acquisition of Alvarion was Israeli company Sigma Wave, controlled by Arie Trabelsi, who also controls SuperCom. During the pricing procedure, Tel Aviv District Court Judge Eitan Orenstein recommended that Sigma Wave withdraw its bid, and accepted Valley Telecom's offer. More than two years later, however, SuperCom was back in the picture, and at the end of last week, officially announced its acquisition of what remained of Alvarion.
"Synergetic acquisition"
Alvarion, which used to provide wireless communications solutions and had a market cap of nearly $1 billion at its peak, entered receivership in the summer of 2013, following an inability to service its debt. Alvarion is now no longer active in the WiMAX market it once led; it provides solutions for the WiFi market. Its business is actually based on that of Wavion, which Alvarion acquired two years before its collapse.
SuperCom said that Alvarion's average annual revenue totaled $8 million in recent years, with a gross profit margin of 50%. SuperCom provides technology in two areas: the production of smart certificates and communications between machines (M2M). The company had $22 million in cash as of the end of 2015 (its first quarter reports have not yet been published). SuperCom will pay $1 million in cash for Alvarion and $1 million in two years,, based on meeting Alvarion's sales targets.
"The acquisition is synergetic, and is consistent with our task of making the world safer and more connected. It will expand SuperCom's capabilities to new markets, products, and services, one of which is Internet of Things security," Trabelsi said. SuperCom's market cap is $60 million, following a 68% drop in its share price over the past year.
Published by Globes [online], Israel business news - www.globes-online.com - on June 19, 2016
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