from the February 2006 issue

Ceragon inks deal with US army

Israeli high-tech company Ceragon Networks Ltd. announced that it has signed an agreement to provide wireless broadband technology to the US Air Force in cooperation with General Dynamics, a leading defense industry contractor based in the United States.

The technology, Ceragons' FibeAir 1500P Advanced Encryption Standard modules, is designed to protect voice and data transmitted across wireless broadband networks. The information security modules will be integrated into communication systems already in use by the US military and government agencies.

Deliveries for the contract, valued at $7 million, will be completed during the second quarter of 2007. "This contract is an important validation of Ceragons' technology and leadership in secure wireless communication," said Ira Palti, President and CEO of Ceragon, "Ceragon is ideally positioned to capitalize on the major opportunities presented by the growing defense market."

Ceragon is traded on the NASDAQ and TASE at an average turnover of $120 million. The company is a leading provider of high capacity wireless backhaul solutions and operates 17 sales offices throughout the world, with more than 150 customers in 70 countries. IAI signed over $4b in contracts in 2006 For the first time in its history, Israel Aerospace Industries Ltd. (IAI) has exceeded $4 billion in new contracts signed in a single year. The company signed contracts worth an aggregate $4.09 billion in 2006, 22% more than the $3.4 billion signed in 2005. IAI predicts that the momentum in its contracts, as well as its profits, will continue in 2007.

IAI will reportedly post a net profit of $110-150 million in 2006, with the exact amount dependent on severance payments to early retirees. IAI's management disclosed that the company's exports rose strongly in 2006, compared with the year before. The company signed $3.6 billion in export contracts, 88% of total contracts, compared with $2.7 billion in exports contracts in 2005, 80% of total contracts for that year.

The proportion of IAI's civilian business grew strongly in 2006 at the expense of its military business. Civilian contracts totaled $1.8 billion, 45% of total contracts, 26% more than the $1.45 billion in 2005. Important contracts last year included a $300-400 million contract with the Indian Defense Research and Development Laboratories (DRDL) to develop an advanced version of the Barak Ship Point Defense Missile System, the Barak 8. IAI also signed a $230 million unmanned aerial vehicle (UAV) deal with India and a $45 million UAV contract with Australia.

US company Nextwave buys Go-Networks
US technology company Nextwave Wireless inc. (Nasdaq:WAVEV) announced the signature of an acquisition agreement with Israeli technology company Go-Networks. Under the agreement Nextwave would pay $13.3 million in cash at signature, and another $25.7 million in shares would be paid in 18 months upon completion of milestones. Nextwave will cover the debts of the Israeli company valued at $7.46 million. The total value of the deal is $46.46 million.

Go-Next has already raised $20 million, so this is not an exit of which investors are very proud. Investors in the company included Pitango Venture Capital, Accel Partners, Apax Partners and Benhamou Global Ventures the venture capital fund of Go-Networks' current chairman Eric Benhamou, formerly chairman of 3Com Corporation (Nasdaq: COMS) and Palm (Nasdaq:PALM) The company developed mobile wireless solutions for broadband data transfer enabling 3G applications including voice, data and video. The company utilizes the WiFi and WiMax wireless communications standards. The company has not made any sales at the time of its acquisition.

Nextwave was founded in 2005 and registered for trading on the Nasdaq in mid-January. The company develops a number of products for wireless communications providers in the field of broadband, multimedia and services for mobile devices.

Reprinted from the Israel High-Tech & Investment Report February 2006

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