Ceragon Networks has announced a definitive agreement to acquire Siklu, a provider of fixed wireless access (FWA) broadband connectivity equipment for an enterprise value of USD 13-15 million. As consideration to Siklu’s shareholders. Ceragon will issue approximately 1.5 million ordinary shares.
Ceragon said it expects to generate USD 25-29 million in incremental 2024 revenue from the acquisition, while assuming some USD 10-12 million in financial liabilities, of which USD 2.5 million will be long-term debt. As part of the transaction, Ceragon will expand its total loan credit facility by USD 5 million to USD 77 million and Siklu’s primary lender will join Ceragon’s lending consortium.
The deal is expected to boost the gross margin at Ceragon as Siklu’s margins are at significantly higher levels. The combination should improve Siklu’s results as well, by leveraging Ceragon’s working capital management capabilities, as well as expanded profitability following synergies. Management anticipates the transaction to add to non-GAAP earnings by the second half of 2024, assuming the deal closes by the end of 2023 as planned.
Ceragon CEO Doron Arazi said the company has identified near-term opportunities to bring Siklu products to regions and customers where Ceragon has an established presence. In the longer term, it intends to combine Ceragon products to create a more comprehensive offering primarily to private networks and small service providers in general, and using Siklu’s millimeter-wave leadership position in North America to increase Ceragon’s presence in that market. Millimeter wave bands are forecast to be the growth segment within wireless transport market in the coming years. The deal should provide Ceragon with an entry point to PtMP technology in general and FWA in particular, Arazi added.
Siklu has deployed over 300,000 outdoor antenna units to date in over 50 countries and has been the leader in market share of E-band installations in the US for the last three years.
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