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Peter Allen, CEO of DragonWave in Ottawa May 7, 2010. (Blair Gable/Blair Gable for the Globe and Mail)
Peter Allen, CEO of DragonWave in Ottawa May 7, 2010. (Blair Gable/Blair Gable for the Globe and Mail)

DragonWave expands with Nokia Siemens' microwave unit buy Add to ...

Ottawa-based wireless technology company DragonWave Inc. is to acquire Nokia Siemens Networks' microwave transport business in a deal worth as much as €110-million ($152-million U.S.).

The two companies are also entering into a strategic partnership.

In a deal the two companies plan to close in the first quarter of 2012, the Canadian wireless equipment provider – which manufactures equipment that helps wireless operators more efficiently transport data between towers and into its core network – will also take on about 360 Nokia Siemens employees, mainly in Milan and Shanghai.

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“This transaction is not that surprising as we expected the sector to consolidate,” said National Bank Financial analyst Kris Thompson. “[Nokia Siemens Networks]has a large installed based of microwave radios (over one million) at large service providers that DragonWave should be able to win business from over the coming years.”

As with most small-cap technology companies, DragonWave's stock has been on a roller coaster ride for investors in the past. The company depends for the majority of its revenues on one key United States wireless operator, Clearwire Corp. , and has often missed revenue targets as expected equipment sales dropped over the past year.

“Through this strategic relationship, customers would continue to receive high-quality services and sales support from Nokia Siemens Networks, while DragonWave’s best-of-breed products would ensure they have access to industry leading technology,” Marc Rouanne, head of Network Systems for Nokia Siemens, said in a news release. “Our intention is to capitalize on DragonWave’s proven capabilities for innovative product development and focus on our end-to-end solutions.”

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