Airspan ‘New Beginnings’ SPAC Defies Ghost of Dotcom Past
(Bloomberg) -- Airspan Networks Inc. is going public through a blank check company merger to fund a push for business with phone carriers that are upgrading to 5G networks and dumping China’s Huawei Technologies Co.
The U.S. wireless equipment maker said it plans to merge with special purpose acquisition vehicle New Beginnings Acquisition Corp. The name is apt: Airspan went to the stock market once before at the height of the dotcom bubble. The shares collapsed and never fully recovered, and the Boca Raton, Florida-based company delisted in 2009.
It’s pressing ahead with the SPAC deal even though the craze for blank-check firms is showing signs of peaking. An index tracking them has fallen by around 20% from its recent high.
“When we went out the first time, as many other companies, it was aspirational -- now it’s real and it’s measurable,” said Chief Executive Officer Eric Stonestrom in an interview. The deal will help Airspan “become a bigger participant in the 5G market,” he said.
The company’s backers include important tech and telecom players such as SoftBank Group Corp., Reliance Jio Infocomm Ltd., Qualcomm Inc. and Foxconn Technology Group. While Airspan is small compared to rivals Huawei, Ericsson AB and Nokia Oyj — it expects an initial enterprise value of about $820 million — the firm has managed to win business with important carriers such as T-Mobile US Inc. in the U.S. and Rakuten Inc. in Japan.
Airspan sees a recent $81 billion auction of U.S. 5G airwaves as the signal for buoyant future mobile equipment sales, as well as the promise of new industrial needs for 5G. It also wants to expand in markets like the U.K., where Huawei is being sidelined and governments are demanding a bigger range of suppliers.
Washington officials say Huawei’s proximity to the Chinese Communist Party make it an unacceptable security risk — something the company denies.
“When you take Huawei out of the supply equation for a quarter of the world, potentially even more, that means there’s a real shortage of companies that know how to build and execute at scale the types of projects that we’re going after,” Stonestrom said.
Airspan says it’s positioned to take advantage of an initiative called Open RAN that aims to make equipment like mobile mast antennas and the software that runs on top of them more inter-operable. This would loosen the dominance of the three biggest suppliers and introduce more competition. Other U.S. companies like Mavenir Systems could also benefit from the changes.
Airspan approached break-even last year. Stonestrom said the company will disclose further financial details later.
It expects about $166 million in proceeds from the SPAC deal, to be spent on a redoubled push for new business. It aims to close the merger in the third quarter of this year. The SPAC structure was the preferred way to go public for Airspan’s existing shareholders and was easier from an economic and regulatory standpoint, said Stonestrom.
Airspan said its existing stockholders will own around 75% of shares in the new company, Airspan Networks Holdings Inc.
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