Powerwave To Acquire The Wireless Infrastructure Business Of Filtronic

Santa Ana, CA and London -- Powerwave Technologies, Inc. and Filtronic plc announced that they have signed a definitive agreement for Powerwave to acquire the majority of Filtronic's Wireless Infrastructure division business for a combination of 20.7 million newly issued shares of Powerwave common stock and $150 million in cash. The specific product lines included in this proposed transaction comprise transmit/receive filters, integrated remote radio heads and power amplifier products, all for use in commercial wireless infrastructure base station equipment (the "Wireless Infrastructure business"). The proposed acquisition does not include point to point radio backhaul equipment, as well as Filtronic's other divisions, of Compound Semiconductors and Defense Electronics.

Ronald J. Buschur, President and Chief Executive Officer of Powerwave, stated: "Our proposed acquisition of the Wireless Infrastructure business of Filtronic will further expand Powerwave's leadership position in the wireless infrastructure marketplace while deepening and strengthening our relationships with our customers. We will be able to significantly expand our transmit and receive filter product lines, as well as complement our existing remote radio head products and RF conditioning products. We are also excited about the opportunity to add one of the premier design and engineering resources in the wireless infrastructure industry along with Filtronic's excellent management capabilities to enhance our global position in both OEM and network operator channels. In addition, we believe that the increased purchasing power from this acquisition will enable Powerwave to achieve significant cost synergies while further leveraging our global manufacturing capabilities."

Professor J. David Rhodes, Group Chief Executive Officer of Filtronic plc, said: "The board of directors believe that the divestiture of the Wireless Infrastructure business will provide significant, demonstrable value to Filtronic shareholders and that this combination with Powerwave will enhance its position as a leading provider in the commercial wireless infrastructure market. I am certain that the Filtronic Wireless Infrastructure business will continue to develop strongly within Powerwave to support customers and give its employees expanding opportunities. Part of the expected consideration is in Powerwave shares. This will enable our shareholders to participate in Powerwave's growth, and indirectly benefit from the sustained growth we are currently experiencing in the Wireless Infrastructure market, where our order book on our largest product line has recently extended from two to twelve weeks despite increasing our production capacity."

The board of directors of both Powerwave and Filtronic have approved the acquisition. The transaction is subject to the approval of Filtronic's shareholders, as well as customary closing conditions and certain regulatory approvals. Under the terms of the acquisition, Powerwave will issue 20.7 million shares of Powerwave common stock and pay $150 million in cash to Filtronic. Powerwave and Filtronic expect the closing of the transaction to occur in the third quarter of calendar 2006. Immediately following the close, Filtronic will have an equity interest in Powerwave of approximately 13% on a fully-diluted basis, assuming conversion of Powerwave's convertible subordinated notes. The Wireless Infrastructure business's gross assets as at May 31, 2005 were GBP 101.1 million and in the year ended May 31, 2005, the business generated Operating Profit of GBP 18.1 million.

Filtronic's Wireless Infrastructure business had a total trailing 12-month revenue run rate for the period ending November 30, 2005 of approximately GBP 180.5 million, or approximately $332.1 million based on an USD/GBP exchange rate of $1.84 on June 9, 2006. This revenue total includes sales of the point to point radio backhaul equipment products, which are not being included in the proposed acquisition. These products accounted for approximately GBP 10 million of revenues during this period.

Powerwave plans to integrate Filtronic's transmit and receive filter capabilities into its base station solutions as well as promote standardization of products and use of common design platforms.

The transaction is expected to be accretive without synergies to Powerwave's earnings per share in the first full quarter following the completion of the acquisition, excluding any acquisition related expenses.

SOURCE: Powerwave Technologies, Inc.