Harris And Stratex Complete Agreement
Harris Corp. and Stratex Networks Inc. announced the completion of the transaction that has created a new company - Harris Stratex Networks Inc. The new company brings together the former Harris Microwave Communications Division and Stratex Networks Inc. The new company, with calendar year 2006 revenue of about $650 M, is the largest independent provider of wireless transmission network solutions, with customers in over 150 countries.
Harris Stratex Networks will be listed on the NASDAQ Global Market, effective January 29, 2007, at market open. Principal headquarters of the new company are in Research Triangle Park, NC, with additional headquarters functions located in San Jose, CA. President and chief executive officer of Harris Stratex Networks is Guy M. Campbell, who was the former president of Harris Corp.'s Microwave Communications Division. Chief operating officer is Tom Waechter, formerly chief executive officer of Stratex Networks, and chief financial officer is Sally Dudash, formerly vice president and controller of Harris Corp.'s Microwave Communications Division.
"Combining these two businesses creates much greater scale, complementary global distribution channels and an unmatched end-to-end product portfolio," said Howard L. Lance, chairman, president and chief executive officer of Harris Corp. "The integration of the combined technology, leadership and market knowledge of the two businesses creates a powerful new company capable of delivering a unique value proposition to a growing base of customers worldwide."
"The new company will be a larger, more competitive, pure-play wireless technology company that is capable of achieving stronger financial performance than as two stand-alone companies," said Charles D. Kissner, chairman of Stratex Networks. "As a result, Harris Stratex Networks will have the financial capacity to invest in new technologies and adjacent wireless markets to fuel future growth."
Harris Corp. is the majority shareholder of the new company, with about 56 percent ownership. Harris will consolidate the results of Harris Stratex Networks in its financial statements, and reflect minority interest for the portion of the company that it does not own. The combination resulted in a gain to Harris, during the third quarter of fiscal year 2007, of approximately $131 M or $0.92 per diluted share. Excluding this one-time gain and anticipated integration and acquisition costs, estimated at $0.16 per diluted share, the combination is expected to be neutral to Harris Corp. earnings per share in fiscal year 2007 and accretive by approximately $0.07 per diluted share in fiscal year 2008.