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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.

“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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