REMEC makes recommended offer for Allgon equivalent to SEK 161 per share

REMEC makes recommended offer for Allgon equivalent to SEK 161 per share The Board of Directors of REMEC, Inc. ("REMEC") is pleased to announce a recommended public offer (the "Offer") for the outstanding shares and warrants of Allgon AB (publ) ("Allgon"). REMEC is a leading US based, international provider of RF Subsystems and components. REMEC is offerering 0.538169 of a share of REMEC Common Stock for each issued Allgon A and B share. No commission will be charged. The offer values the outstanding share capital of Allgon at SEK 4,712 million (USD 488.25 million) based on REMEC's closing price on NASDAQ on September 27, 2000, USD 31.00. All shareholders will have the right to sell up to 500 shares for SEK 161 in cash The Offer implies a premium of 23 per cent to Allgons closing price on September 27, 2000. The Offer implies a premium of 64 per cent to Allgon's closing price on August 21,2000, the date prior to the unsolicited offer. The Board of Directors of Allgon unanimously recommend that shareholders accept the offer Allgons A-shareholders have delivered to REMEC irrevocable undertakings to tender their shares and warrants, representing 26.4 per cent of the voting rights and 3.5 per cent of the share capital of Allgon. REMEC will apply for a secondary listing on the OM Stockholm Stock Exchange Ronald E. Ragland, Chairman and Chief Executive Officer of REMEC stated: "The combination of ALLGON and REMEC brings together two formidable and complimentary technology organizations to form a world class wireless infrastructure company. In addition to substantial synergies in markets, products, regional presence and customers, the combination creates a revenue critical mass that we believe will accelerate market success and generate operating cost efficiencies. We at REMEC are proud to join a team with a strong heritage of product excellence and to be associated with Sweden's technology achievements." Commenting on the offer today, Gunnar Bark, Chairman of Allgon said: "Allgon and REMEC make an ideal combination. Our complementary resources in terms of world leading products, strong proprietary technology and skills will provide an outstanding platform for additional shareholder value and long-term growth. The proposed combination is in the best interest of shareholders, employees and customers of both companies. The Board of Directors fully supports the combination, and recommends all Allgon's shareholders to accept the offer." Together REMEC and Allgon will be and international leader in several high growth market sectors: Radio frequency equipment for cellular OEM's worldwide. Coverage and capacity enhancement equipment for cellular service providers. Broadband equipment for MMDS, LMDS, Point to Point Radio, V.SAT and Wireless LAN markets. Fibre optic modules. The two companies have highly complementary products and technologies and each believe that significant synergistic benefits will accrue from the combination. Revenue synergies are expected from additional market penetration, improved manufacturing capability and significant cross- selling opportunities. The combined operations will have the critical mass necessary to support our major OEM and service provider customers in North America, Asia and Europe. Allgon's new factory in China provides a strong platform for expansion plans in this rapidly developing market area. The combination of REMEC's and Allgon's already strong technical capabilities will position the company to partner with global OEM customers to develop highly integrated radio frequency modules for the third generation of wide band cellular equipment. The need for third generation equipment is expected to expand rapidly as global service providers respond to the increasing need for mobile data. Combined sales are in excess of USD 500 million, based on annualised most recent quarterly accounts. The combined company will have over 3,000 employees. The Offer Key Terms of the Offer: REMEC is offering 0.538169 of a share of REMEC Common Stock for each issued Allgon A and B share. No commission will be charged. All shareholders will have the right to sell up to 500 shares for SEK 161 in cash REMEC will offer a maximum of 15,750,000 shares of its Common Stock for all of the outstanding above capital of Allgon REMEC is offering SEK 9.40 for each outstanding warrant. The newly issued shares will carry rights to dividends as of the current fiscal year. The Offer is subject to the following conditions: REMEC shareholder approval Acceptance by shareholders representing more than two thirds (66.7%) of the total number of shares and votes of Allgon. That regulatory requirements in the United States and Sweden and in any other concerned country are satisfied and that the necessary approvals of the relevant authorities in these countries are obtained That prior to the date when announcement has been made that the Offer will be completed, the acquisition, in the judgement of REMEC, is not rendered wholly or partially impossible or significantly impeded as a result of legislation, regulation, a decision of court or public authority or comparable measures in Sweden or elsewhere, which exists or may be anticipated, or as a result of other circumstances beyond the control of REMEC. Premium and bid value The offer values the outstanding share capital of Allgon at SEK 4,712 million (USD 488.25 million) based on REMEC's closing price on NASDAQ on September 27, 2000 The offer implies premia of 23 per cent and 64 per cent to Allgon's closing price on September 27, 2000 and August 21, 2000, the date prior to the unsolicited offer respectively The offer is recommended by the board of Allgon The Board of Directors of Allgon unanimously recommends that shareholders accept the offer. Acceptance of offer Allgons A-shareholders have delivered to REMEC irrevocable undertakings to tender their shares and warrants, representing 26.4 per cent of the voting rights and 3.5 per cent of the share capital of Allgon. Number of shares REMEC had approximately 47.1 million shares outstanding before the current acquisition. As a consequence of the acquisition of Allgon, REMEC will issue up to 15,750,000 new shares, assuming full subscription of the Offer. Post acquisition the current shareholders in REMEC will hold 75% and the current Allgon shareholders will hold 25% of the merged company. Timetable An offer document is expected to be distributed to shareholders of Allgon as soon as practicable, consistent with compliance with regulatory requirement. A more detailed timetable will be released in due course. REMEC's ownership in Allgon REMEC does not currently own any shares in Allgon. Stockholm September 27, 2000 Board of Directors, REMEC, Inc Board of Directors, Allgon AB (publ) Financial Advisors Dain Rauscher Wessels and H&Q Technology are acting as financial advisors to REMEC in connection with the Offer. Morgan Stanley Dean Witter and Erneholm & Haskel are acting as financial advisors to Allgon. Contact persons: REMEC Ronald E Ragland Allgon Gunnar Bark +46 (0)8 587 20 660, +46 (0)708 402 187 HQ Technology Jussi Saarinen 070-486 1936 Morgan Stanley Dean Witter Rory Maw +44-(0)788 762 6654 alt. Per Hillerström +44-(0)411 017 826 REMEC is a world leader in microwave and millimetre wave wireless technology and has an emerging presence in active fibre optic components. REMEC is in strong financial condition with over 325 MUSD in shareholders' equity and has ready access to the major capital markets. REMEC management has a strong track record of acquisition integration, including the acquisitions of a public company in the United Kingdom. REMEC is a leading designer and manufacturer of high frequency subsystems used in the transmission of voice, video and data traffic over wireless communications network. Its products are designed to improve the capacity, efficiency, quality and reliability of wireless communications infrastructure equipment. REMEC also develops and manufactures highly sophisticated wireless communications equipment used in the defence industry, including communications equipment integrated into tactical aircraft, satellites, missile systems and smart weapons. REMEC manufactures products that operate at the full range of frequencies currently used in the transmission of wireless communications traffic, including at radio frequencies (RF), microwave frequencies and millimetre wave frequencies. By offering products that cover the entire frequency spectrum for wireless communications, REMEC is able to address opportunities in the worldwide mobile wireless communications market as well as the global fixed access broadband wireless market. In the mobile wireless communications market, REMEC designs and produces subsystems used in base stations for analogue cellular and digital cellular systems, including personal communication systems (PCS), and emerging third generation (3G) networks. In the fixed access broadband market, it develops and manufactures products for point-to-point, point- to-multipoint and satellite-to-multipoint systems. Its point-to-multipoint products are designed to be integrated into various broadband distribution systems, including local multipoint distribution systems (LMDS), and multichannel multipoint distribution systems (MMDS). Fixed access broadband wireless systems can complement or provide cost effective alternatives to copper wire, cable and fibre optic-based communications networks. Demand for wireless infrastructure equipment is increasing due to a number of factors, including the deregulation of the telecommunications industry, advances in wireless communications technology and business and residential demand for wireless services such as digital cellular, Internet access, two-way paging and specialised mobile radio services. With industry estimates of 975 million cellular/PCS subscribers worldwide by 2003 and 502 million Internet users worldwide by 2003, it is anticipated that there will be strong demand for services by communications networksa with the capacity to provide high speed Internet access for mobile wireless products. In addition to mobile applications, Internet use and corporate data applications are also expected to increase the demand for fixed access broadband wireless networks. REMEC markets its wireless products primarily to original equipment manufactures (OEMs), such as Motorola, Inc., Digital Microwave Corporation, Nokia Corp., Alcatel Network Systems, P-COM, Inc., STM Wireless, Inc., Lucent Technologies Inc., Nortel Networks Corporation and SpectraPoint Wireless LLC. By outsourcing subsystems to REMEC, OEMs are able to accelerate their time to market in a cost effective manner and to leverage their core competencies of full system design and integration. REMEC has augmented its existing technology base by acquiring specialised technology companies that complement its products offerings and market strategies. Over the last three years, REMEC has acquired eight companies, including its most recent acquisition in April 1999 of Airtech plc, a United Kingdom-based manufacturer of mobile wireless products with sales offices in Malaysia and China. In acquiring Airtech, REMEC was able to establish operations from which it could more directly address the European and Asian wireless infrastructure markets. A consummation of the proposed transaction with Allgon would further strengthen this European position. For the fiscal year ended January 31, 2000, REMEC reported revenues of $189.2 million and net income of $1.8 million. For the six months ended July 28, 2000, REMEC reported revenues of $119.6 million and net income of $4.6 million. Allgon is one of the world's leading suppliers of mobile communications infrastructure equipment and mobile handset antennas. Allgon Systems is one of the world leaders in mobile infrastructure equipment. AMC is the would number one in mobile handset antennas. Allgon Microwave is developing a strong niche in microwave communication systems based on superior functionality, including unique Ethernet capability, Wireless Solutions has amongst the first commercial Bluetooth products and unique Wireless LAN products. Allgon is listed on the OM Stockholm Exchange. Allgon's head office is located in the northern Stockholm, Sweden. The company has sales in approximately sixty different countries, and 97 per cent of sales originate from customers outside Sweden. Sales fiscal 1999 SEK 2.136. Profit before tax 1999 SEK 127. Total group sales for the first six months of 2000 amounted to SEK 1,314 million. Profit before taxes amounted to SEK 30 million. The number of employees was 1,249 at year-end 1999. Allgon was founded in 1946. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2000/09/28/20000928BIT00600/bit0001.doc http://www.bit.se/bitonline/2000/09/28/20000928BIT00600/bit0002.pdf