PCTEL expands UMTS products with acquisition of SWT

July 5, 2005

PCTEL announced that it has acquired all of the shares of Sigma Wireless Technologies (SWT) from the Sigma Communications Group, one of Ireland's telecommunications and mobile companies.

SWT is based in Dublin and develops and distributes innovative antennas for public safety and for the rapidly growing UMTS cellular networks. The newly acquired operation will become part of PCTEL's Antenna Products Group (APG).

The purchase consideration paid by PCTEL at the closing included EUR 19.5 million in cash and the assumption of approximately EUR 2.5 million in pension liability. The total acquisition price was EUR 22 million or approximately $27 million. The selling stockholders of SWT may also earn up to an additional EUR 7.5 million ($9.1 million) in cash based on SWT's revenue performance over the 18-month period ending December 31, 2006. Transaction fees will be approximately $1.7 million.

The acquisition establishes a European presence for PCTEL, whose antenna sales to date have been principally in North and South America and China. In addition, the acquisition positions PCTEL in the rapidly growing UMTS infrastructure market with leading edge antenna technology and associated control systems. The new generation of cellular technology requires frequent optimization and the ability to manage clusters of antennas. SWT's iVET (integrated Variable Electrical Tilt) antenna technology permits cellular networks to remotely adjust and optimize coverage areas and antenna clusters in response to key network performance parameters, such as signal to noise ratios. Adjustable Remote Tilt or Remote Electrical Tilt (RET) antennas permit operators to adjust - using laptop computers or handheld devices - an antenna's tilt angle.

The ability to remotely control UMTS antennas with SWT's Blustream antenna management system eliminates serial re-design, the costly process of gaining access to an antenna site, and shutting down transmitter sites in order to make the adjustments. Operators anticipate that iVET deployment will result in both improved Quality of Service (QoS) and lower costs.

"The iVET antenna technology gives PCTEL a strong position in the rapidly growing 3G cellular broadband market, an important target for our company," said Marty Singer, PCTEL's Chairman and CEO. "We believe in pervasive wireless broadband and we are now in a better position to compete in that space. We are also excited about establishing a stronger European sales presence, expanding our revenue base, and taking the next step in our continued efforts to build a formidable wireless company. First and foremost, though, we view this as an important technology acquisition," added Singer.