425 1 a2103885z425.htm FORM 425

 

 

 

Filed by Andrew Corporation Pursuant to Rule 425

Under the Securities Act of 1933

And Deemed Filed Pursuant to Rule 14a-12

Under the Securities Exchange Act of 1934

Subject Company: Allen Telecom Inc.

Commission File No.: 001-06016

 

 

                The following are a series of slides included in a presentation made to members of the financial analyst community by representatives of Andrew Corporation and Allen Telecom Inc.

 


 

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Market Leadership

 

[LOGO]

 

 



 

 

Safe Harbor

Some of the statements in this news release are forward looking statements and we caution

our stockholders and others that these statements involve certain risks and uncertainties.

Factors that may cause actual results to differ from expected results include the company's

ability to consummate and integrate this acquisition and to realize the synergies and cost

savings anticipated from this transaction, the effects of competitive products and pricing,

economic and political conditions that may impact customers' ability to fund purchases of

our products and services, the company's ability to achieve the cost savings anticipated

from cost reduction programs, fluctuations in international exchange rates, the timing of

cash payments and receipts, end user demands for wireless communication services, and

other business factors. Investors should also review other risks and uncertainties discussed

in company documents filed with the Securities and Exchange Commission.

 

 



 

Additional Information and
Where to Find It

 

Andrew intends to file a registration statement on Form S-4 in connection with the transaction, and Andrew and Allen intend to mail a joint proxy statement/prospectus to their respective stockholders in connection with the transaction. Investors and security holders of Andrew and Allen are urged to read the joint proxy statement/prospectus when it becomes available because it will contain important information about Andrew, Allen and the transaction. Investors and security holders may obtain a free copy of the joint proxy statement/prospectus (when it is available) at the SEC’s web site at www.sec.gov. A free copy of the joint proxy statement/prospectus may also be obtained from Andrew or Allen.  Andrew and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Andrew and Allen in favor of the transaction.  Information regarding the interests of Andrew’s officers and directors in the transaction will be included in the joint proxy statement/prospectus. Allen and its executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Andrew and Allen in favor of the transaction. Information regarding the interests of Allen’s officers and directors in the transaction will be included in the joint proxy statement/prospectus.

 

 



 

 

Transaction Highlights

 

Transaction Structure:

 

100% stock-for-stock transaction

Common Equity Value:

 

$504 million

Aggregate Value:

 

$582 million

Closing Conditions:

 

HSR review

 

 

Customary closing conditions

Target Closing:

 

Expected Q2 CY2003

Exchange Ratio:

 

1.775 Andrew shares / 1 Allen share

Pro Forma Ownership:

 

64% Andrew / 36% Allen

Board of Directors:

 

10 Andrew

 

 

2 Allen

 

 



 

Transaction Rationale

 

Strategic Benefits:

Strengthens leadership position in the RF footprint market

— RF coaxial cables

— Power amplifiers

— Filters

— Base station antennas

Adds new growth areas including Geolocation and In-Building Systems

— Leading supplier of solutions in these markets

Provides “end-to-end,” highly integrated solutions to customers

 

Financial Benefits:

Potential for significant cost savings

— Estimated $40 million in synergies post-integration

Accretive to earnings in FY2004

Strong balance sheet and enhanced financial flexibility

 

 



 

[LOGO]
Product Segmentation

 

[CHART]

 

Note: (1) Excludes $42MM of Other revenue

 

 



 

Consolidating the RF Path

 

[GRAPHIC]

 

 



 

Established Leadership
Across RF Footprint

 

[CHART]

 

 



 

Unrivaled Scale…

 

[CHART]

 

 

Note: (1) Total capitalization defined as market value of equity on 2/14/03

and book value of total debt

 

 



 

…and Market Strength

 

 

CY2002 Sales (1)                                                     CY2002 R& D (1)

 

[CHART]                                                                             [CHART]

 

 

Note: (1) Based on latest quarterly SEC filings and earnings releases; Andrew pro

forma for Celiant; REMEC based on street estimated post merger

integration figures

 

 



 

Diversified Revenue Base

 

Product Segments                                                    Geographic Mix

 

[CHART]                                                                          [CHART]

 

 

 



 

Established Relationships with Blue
Chip Customers

 

OEMs/Integrators                                   Operators/Users                                     Others

 

[CHART]                                                       [CHART]                                            [CHART]

 

 



 

Strategy For Growth

 

Increase Our Addressed
   Wireless Markets

Global Addressed Markets

Increase Our Market Share

[GRAPHIC]

Expand Globally

 

 

                More Room To Grow

 

 

 

 



 

Market Opportunity

 

Global Wireless Subscribers

 

Global Minutes of Use (MOU)

 

 

 

[GRAPHIC]

 

[GRAPHIC]

 

 

 

Source: Street Estimates, Gartner Group

 



 

Our Market Still Projects
Modest Growth

 

[GRAPHIC]

 

Source: Morgan Stanley Research January 2003, Dell’Oro Group

 



 

Power Amplifier Market

 

[GRAPHIC]

 

Source: Morgan Stanley, January 2003

 



 

Global Power Amplifier Market

 

OEMs accelerating outsourcing

 

 

[CHART]

 

Source: Morgan Stanley, Andrew

 

 



 

Andrew Overview

 

[GRAPHIC]

 



 

 

Leading pure play in wireless subsystem infrastructure technology

    — Fiscal 2002 revenues of $865MM

    — Founded in 1937; Headquartered in Orland Park, IL

    — Over 4,500 employees worldwide

    — $900MM market capitalization

 

Blue Chip customer base

    — Over 1,000 customers in 170 countries

    — 71 sales offices worldwide

    — Manufacturing facilities in 12 countries

 

Broad wireless subsystem infrastructure platform

    — Wireless Infrastructure

    — Fixed Telecom Subsystem Solutions

    — Broadcast Antenna Systems

    — Telematics

    — In-Building Communications

 



 

A Leader in Growth Markets—
Wireless Communications

 

[GRAPHIC]

 

 



 

A Leader in Growth Markets—
Fixed Telecom Subsystems

 

[GRAPHIC]

 

 



 

A Leader in Growth Markets—
Broadcast Antenna Systems

 

[GRAPHIC]

 

 



 

A Leader in Growth Markets—
Broadband Satellite Systems

 

[GRAPHIC]

 



 

A Leader in Growth Markets—
In-Building/Distributed Communications

 

[GRAPHIC]

 

 



 

Allen Telecom Overview

 

Leading supplier of wireless infrastructure with strong market share

Strong relationships with 6 of 7 leading OEM’s as well as over 200 global wireless carriers

 

[GRAPHIC]

 



 

Leading supplier of wireless infrastructure with strong market share

Strong relationships with 6 of 7 leading OEM’s as well as over 200
global wireless carriers

 

[GRAPHIC]

 



 

Base Station Subsystems and
Components

 

One of two major worldwide players in filters / combiners

Preferred supplier to six of top seven OEM’s

    — Integrated suppliers to OEM’s

Fiber Distribution Systems

New Product Pipeline

 

 



 

Repeaters and In-Building Coverage

 

 

World’s largest manufacturer of Wireless Repeaters

Current growth driven by innovative solutions

     — In-train Repeaters – Provide continuous coverage and high-speed hand-off

     — Boosters – Extends reach of existing networks

 

Urban Distributed Antenna Systems

In-Building Coverage Systems

 



 

Base Station and Mobile Antennas

 

 

80% of business driven by base station

 

Leading domestic market share Base Station and Mobile Antennas

Growth Opportunities

    — Dual-Band (base station & mobile)

    — Satellite Digital Audio Radio (SDAR)

       • Customers include XM Radio and Sirius

 



 

Wireless Engineering and Consulting
Services

 

 

#1 Spectrum Management Solutions

    — Microwave Radio Links

RF Consulting and Engineering

    — Software Solutions

    — Network Design

    — Radiation Safety

 



 

Geolocation Products

 

 

Network-based E911 solutions

Signed contracts with Verizon Wireless
and AT&T Wireless in 2001

    — $8 million in shipments in CY2001

    — $87 million in shipments in CY2002

Additional contracts for 2002

    — Triton PCS                                                                                                                    [PHOTO]

    — Rural Cellular

    — Advantage Cellular

    — Centennial Wireless

    — HickoryTech

    — Eloqui

    — Dobson

Backlog approximately $87 million
as of December 31, 2002

 



 

Allen’s Network-Based E911 Solution

 

 

Approximately 156,000 E911 calls per day

 

FCC is mandating that carriers implement an E911 solution between 2002 and 2005

     — Solutions can be either network based or handset based

 

Allen’s network based solution – Geometrix®                                                            [PHOTO]

    — GSM              — 1xRTT

    — TDMA          — iDEN

    — CDMA          — Analog

 



 

The Future for Geolocation

 

 

Success/Failure of Competitive Alternatives

FCC Regulatory/Enforcement

Expansion of Existing Contracts

    — GSM

    — 1xRTT

Single Nationwide Network $300—$400 million

The largest of only two providers of network-based systems

 



 

Pro Forma Financial Overview

 

 



 

Compelling Financial Profile

 

 

Accretive to pro forma earnings per share post-integration

Accelerates revenue growth and diversification

Unrivaled scale and product breadth

     — Pro forma CY2002 revenues of $1.5 billion

     — Pro forma CY2002 R&D spending of $104 million

Substantial revenue upside in new growth areas

Significant merger synergy opportunities

Strong balance sheet and enhanced financial flexibility

Combined positive cash flow

 



 

Integration

 

 

Integration planning has commenced

    — Manufacturing

    — Research and development

    — Operations and materials costs

    — Sales and marketing

    — Administration

 

Estimated $40MM+ synergies post-integration

    — $20MM estimated achieved during FY2004

    — $40MM annual run rate by Q4 FY2004

Combined platform generates new customer opportunities

 

 



 

Pro Forma Financial Summary

 

 

 

Andrew

 

Allen

 

Pro Forma

 

($MM)

 

CY2002(1)

 

CY2002

 

CY2002 (2)

 

Income Statement

 

 

 

 

 

 

 

Revenues

 

1,063

 

417

 

1,480

 

Gross Profit

 

287

 

103

 

390

 

Balance Sheet

 

 

 

 

 

 

 

Total Assets

 

1,098

 

529

 

1,627

 

Cash

 

71

 

48

 

119

 

Net Debt

 

(8

)

28

 

20

 

 

 

Note: (1) Pro forma for the acquisition of Celiant

(2) Excludes synergies and transaction adjustments

 

 



 

Transaction Rationale

 

 

Strategic Benefits:

 

Strengthens leadership position in the RF footprint market

     — RF coaxial cables

     — Power amplifiers

     — Filters

     — Base station antennas

Adds new growth areas including Geolocation and In-Building Systems

     — Leading supplier of solutions in these markets

 

Provides “end-to-end,” highly integrated solutions to customers

 

Financial Benefits:

 

Potential for significant cost savings

     — Estimated $40 million in synergies post-integration

Accretive to earnings in FY2004

Strong balance sheet and enhanced financial flexibility