Ceragon Networks agreed to acquire Siklu, a provider of multi-Gigabit “wireless fiber” connectivity in urban, suburban and rural areas, for an enterprise value of $13-15 million.
As consideration to Siklu’s shareholders, Ceragon will issue approximately 1.5 million ordinary shares. Ceragon is expected to assume financial liabilities of approximately $10-12 million, of which approximately $2.5 million are classified as long-term debt.
Ceragon is expected to generate approximately $25-$29 million in incremental 2024 revenue from this acquisition. The acquisition is expected to be accretive to the consolidated gross margins of Ceragon as Siklu’s margins are at levels significantly higher than Ceragon’s historical margins. Ceragon management expects the combination to improve Siklu’s results by leveraging Ceragon’s working capital management capabilities, as well as expanded profitability following synergies. Inclusive of these business improvements, management anticipates the transaction to be accretive to non-GAAP earnings by the second half of 2024.
Doron Arazi, Ceragon CEO, said “We expect this combination to accelerate our growth strategy, by improving our key financial metrics and reducing customer concentration in the short and long run. We have identified near-term opportunities to bring Siklu products to regions and customers where Ceragon has an established presence, and, for the longer term, to combine Ceragon products to create a more comprehensive offering primarily to private networks and small service providers in general, and leveraging Siklu’s millimeter-wave leadership position in North America to increase our presence in this key market in particular.”
