Airvana in $530M Go-Private Deal As Buyout Market Thaws

Femtocell maker Airvana Inc. (AIRV) is going private.

The telecom equipment maker said Friday it has agreed to be bought for $530 million by a newly formed group of investors that includes hedge-fund operator S.A.C. Capital and Blackstone Group LP. The entity is called 72 Mobile Holdings LLC.

Investors cheered the news – Airvana’s stock skyrocketed nearly 21 percent by early afternoon. To be sure, the transaction demonstrates the continued thaw in the buyout market, heralding, with any luck, the end of one of the worst economic downturns in U.S. history.

The per-share payment totals $7.65, a 23 percent premium over Thursday’s closing price. Airvana said some of its management – including president and CEO Randy Battat and founders Vedat Eyuboglu and Sanjeev Verma – will exchange a portion of their shares for a stake in the company after it becomes private. The deal should be completed in the first quarter of 2010.

When that happens, Merle Gilmore, who used to serve as president of Motorola Inc.’s communications enterprise division, will become chairman of the board. And, Battat said, Airvana will maintain its focus on developing EV-DO software and femtocells, routers that sit inside homes and buildings to boost cell-phone reception.

However, there could be a fly in Airvana’s merger ointment. On Friday, law firm Tripp Levey PLLC said it’s investigating Airvana’s going-private deal, which has been unanimously approved by the company’s board and a special committee of independent directors. Tripp Levy said it wants to know whether the amount to be paid to Airvana shareholders is “grossly unfair, inadequate, and substantially below the fair or inherent value of Airvana.”

The firm noted in a press release that “members of Airvana may have breached their fiduciary duties by not acting in Airvana’s shareholders’ best interests in connection with the sale process of Airvana.”