Powerwave announces strategic relationship with Celestica
Feb 10, 2006
Deal includes sale of Philippine manufacturing operation to Celestica. Powerwave continues to leverage EMS model for operational excellence.
Powerwave Technologies, Inc. (NASDAQ:PWAV), a global supplier of wireless infrastructure solutions, and Celestica Inc. (NYSE:CLS; TSX:CLS/SV) announced that they have entered into an agreement whereby Celestica will acquire Powerwave's Philippines manufacturing operations.
Under the terms of the agreement, Celestica and Powerwave will enter into a multi-year supply agreement that will see Celestica become Powerwave's preferred outsourcing partner. Celestica will pay Powerwave approximately $19 million in cash to acquire the manufacturing operation, including buildings and all inventory and equipment at the site. Additionally, the facility's entire highly skilled workforce - approximately 600 workers - will become part of Celestica. The transaction is subject to certain closing adjustments and conditions and is expected to close in March 2006. Celestica has supported Powerwave as a strategic EMS provider since 2002.
The site, located in Cabuyao Laguna, close to Manila, was acquired by Powerwave as part of its acquisition of certain assets and liabilities of REMEC's Wireless Systems business in September 2005. The facility, which primarily produces power amplifiers for use in wireless infrastructure networks, will continue to manufacture products for Powerwave.
The sale of the Philippines manufacturing operation and the expanded relationship with Celestica are part of Powerwave's overall strategy to optimize manufacturing operations to support its global customer base while reducing operating expenses. For Celestica, the deal enhances the company's manufacturing profile in the Asia-Pacific region, adding new capabilities and capacity.
"With a highly skilled workforce and low cost structure, the Philippines remain a very strategic manufacturing locale for Powerwave," said Ronald J. Buschur, President and Chief Executive Officer of Powerwave Technologies. "This arrangement allows Powerwave to leverage the electronic manufacturing services model to maintain operational flexibility and reduce costs, yet still have access to technical talent and manufacturing capacity."
"The addition of these advanced manufacturing capabilities in the Philippines strengthens Celestica's ability to help our valued customers, such as Powerwave, achieve their business goals," said Stephen Delaney, Chief Executive Officer of Celestica. "Our global manufacturing network and wide range of integrated solutions allows us to operate as a seamless extension of Powerwave's operations."