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DIGITAL MICROWAVE, INNOVA PLAN TO MERGE

SAN JOSE, Calif.-Wireless transmission solutions providers Digital Microwave Corp. and Innova Corp. announced plans to merge in a tax-free pooling-of-interests transaction that will give Innova shareholders a 27-percent interest in the combined company, announced the companies.

Terms of the definitive agreement call for Digital to exchange 1.05 shares of its common stock for each outstanding share of Innova’s. Digital also will exchange stock options and warrants using the same ratio, the companies said. Digital expects to issue up to 18.5 million shares. The transaction represents a premium of about 28 percent to Innova’s 30-day average closing price.

The boards of directors of both companies have approved the merger, and it is expected to close within 90 days.

“Innova’s focus over the past few years has been on reducing costs of its low- to medium-capacity products, and is a perfect complement to Digital Microwave’s new advances in high-capacity radio systems and their strong global sales, distribution and service network,” said Frank Grenon, president and chief executive officer of Innova.

Digital Microwave Chairman and CEO Charles Kissner said, “the combined product development capabilities will accelerate the ability to bring to market important new products to serve new emerging data services and voice network applications.”

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