European Communications

Last update12:35:48 PM

NSN sells microwave transport business

Nokia Siemens Networks is to sell its microwave transport business to US-based vendor DragonWave as part of a strategic technology and supply arrangement.

Initially, DragonWave will pay €30 million for the business, which includes NSN’s OSS and related support functions.

The payment includes €10 million in cash, €5 million worth of DragonWave common shares, the assumption of employee liabilities of €10 million and a capital asset lease arrangement of €5 million.

NSN said it could gain a further €80 million from sales performance based “earn-out” payments following closure of the deal, which the companies hope to achieve in Q1 next year.

An NSN spokesperson said the deal was "a step towards improving the competitiveness of the company as a standalone entity, by bringing more focus to the company’s innovation and investment".

Last month, the Finland-based vendor unveiled a new chairman and a €1 billion cash injection.

DragonWave manufactures high-capacity packet microwave solutions for next-generation IP networks. Its principal application is wireless network backhaul.

As part of the deal DragonWave becomes NSN’s preferred, strategic supplier of packet microwave and related products.

“This relationship is transformational, giving us the ability to serve customers who want to access an integrated solution,” said DragonWave president and CEO Peter Allen.

“In addition, it provides DragonWave an expanded technology base to address those customers who wish to purchase stand-alone best-in-breed products.”

Three hundred and sixty NSN staff will transfer to DragonWave.