Airspan to go public again with SPAC cash injection

Airspan puts $160m+ on the balance sheet to take on 5G and Open RAN opportunity.

Radio access equipment and software vendor Airspan has secured over $209 million investment as it heads for a public stock market listing. 21 years after its first listing and 12 years after it went private again, the company is headed for a public listing on the NYSE under the symbol MIMO. The transaction is being via a SPAC run by an investment company called New Beginnings Acquisition Corp (NBA) and sees a significant investment sum committed by two mobile network operators.

The bulk of the investment has come from “blank cheque company” NBA, which will own 17% of the new company for its sponsor and public shareholders. 8% of the company will be owned by existing shareholder Softbank and DISH, who have invested a combined $75 million via a vehicle known as a PIPE. Airspan’s existing shareholders will own 75% of the new listed entity. Qualcomm, an existing investor and a key chip supplier for Airspan’s products, also remains invested, as does reliance Reliance Jio and Foxconn.

The deal, which values Airpsan at $822 million, will put $166 million in cash onto the company’s balance sheet. The money will be used to fund “operating expenses incurred to support customer demand” and “working capital to support increasing production demand”.

In a pre-recorded conference call, Michael Liebowitz, CEO and Director, NBA, said, “This business is at a moment in time on the 5G upgrade cycle and it has the leading position in this area. NBA has $116.5 million of cash and has raised $75 million in a committed PIPE to fund this transaction. This gives the company its field to execute the strategic growth plan and  to be the key player in building out 5G.”

Liebowitz added, “The majority of these proceeds – $166 million – go right onto the balance sheet, boosting liquidity $65 million in net cash, taking into account $91 million of debt.  We feel very good about this structure, given that over 85% of the capital goes directly on the balance sheet and provides Airspan the means to build out 5G around the globe.”

$18 million (“a small amount”, Liebowitz said) has been set aside for a one-time funding of a Management Incentive Programme – a tool used by Private Equity companies to motivate the existing executive management to deliver on the agreed growth strategy.

Eric Stonestrom, CEO, said on the call that as Huawei receives bans from many Western countries and Nokia and Ericsson struggle to match the innovation path required, Airspan is the only North American integrated 5G access provider and as such is well positioned to benefit from multiple government stimulus programmes. Similar activities are expected in other countries. The company has been hit in absolute terms by a slowdown in sales to Sprint, with sales falling from 2018-2019 and 2019-2020. But Stonestrom that had lead it to diversify and grow other income streams.

“We have had a tremendous diversification of our revenue base, from being primarily a supplier to Sprint and Softbank as the Sprint owner. As Sprint and T-Mobile froze capex we worked very hard to get additional customers. Excluding Sprint we grew revenue 122% from 2019 to 2020, and we see continued growth as these trends come to bear.”

“We forecast a long term growth rate of 35% and have a strong confidence in beating that growth rate due to the scale of the market and the unique position Airspan has.”

Stonestrom added that Airspan had lifted gross margins to 49%, up from 32% in 2018, “consistently increasing margins due to the increasing software content in our deliveries.”



It’s a brave forecast, but of the companies that position themselves as Open RAN challengers in the US (Altiostar, Mavenir, Parallel Wireless and Airspan), Airspan has by far the longest track record (it was originally a project within DSC Communications in the UK before being spun out in 1998 and relocating its HQ to the US when it IPO’d in 2000) and has shown itself capable of manufacturing and shipping hundreds of thousands of small cell base stations in a year. It also has expertise in what are now bands n77/n78 going back decades.

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