TE AND AIRGAIN CORPORATION 

TE CONNECTIVITY
AND AIRGAIN
Matt Eilbacher, Matt Rigolizzo, and
Zhehui Wang
 DEAL OVERVIEW

Strategic
Rationale
Industry  Deal Airgain is experiencing
Antenna Technology Acquire Airgain, Inc. high growth (21.5%
CAGR from 2015 to 2018)
with a gross margin
of 45.7%

Industry
Overview
Value Creation Key Risk Airgain focuses on the
Integration of growing consumer (9%
Acquisition results in
Airgain operations into CAGR), automotive
$47.2M of operating
TE Connectivity's (15%) and enterprise
synergies 
existing infrastucture (26%) target markets,
with a combined TAM of
$6.7B
 AIRGAIN OVERVIEW
BUSINESS DESCRIPTION BUSINESS OVERVIEW
• Leading provider of advanced an
FY2019 Revenue $55,739,000
tenna  
FY2019 EBITDA $1,528,000
 technologies used to enable hig
h            FY2019 EBITDA Margin 2.74%

performance wireless networkin Headquarters San Diego, California

g Market Cap (4/26/20) $74,921,363

• Products have a broad range of Stock Price (4/26/20) $7.73

consumer, enterprise and Employees 126

automotive applications
1-YEAR STOCK CHART
 ACQUISITION RATIONALE: OPERATING SYNERGIES

Synergy Valuation: $47.2M
Total Value with Synergies:
$105.7M
Price per Share with
Synergies: $10.91
COST SYNERGIES ASSUMPTIONS

1. Rent and Occupancy Costs: Merge with TE's existing facilities and

divest half of Airgain's facilities 
2. Staff Reductions: Remove management team and overlapping internal
functions (HR, Sales, Marketing, etc.)
3. G&A: Optimization through managerial and operational efficiencies
4. Research & Development: Reduce overlapping research on sensor
development and OEM
5. Manufacturing and Design: Divest half of Airgain's manufacturing
and design facilities
 VALUATION SUMMARY
VALUATION AND OFFER ASSUMPTIONS

Risk-Free Rate 0.62%

• Standalone DCF Valuation:
Equity Beta 1.13

$58.6M Market Risk Premium 7.56%

• DCF Valuation with Synergies: Terminal FCF Growth 2.0%

WACC 9.16%
$105.7M

• Current Market Cap (4/26/20):

$74.9M

• Offer: $97M (29.5% Premium)

SENSITIVITY ANALYSIS
 RISKS
FINANCIAL RISKS

Overpaying Due to Standalone Valuation

• Historical financials only available beginning in 2016, which may
have affected valuation assumptions and projections and led to an
inflated offer price

Failure to Realize Synergies

• An inability to implement and execute on forecasted operating
synergies to the fullest extent may impact the NPV of this deal,
including rent and occupancy costs, staff reductions, G&A expenses,
R&D expenses and manufacturing andRISKS
NON-FINANCIAL design expenses

Equipment and Infrastructure Frictions

• An inability to manufacture Airgain's suite of products using TE
Connectivity's existing infrastructure and equipment will result in a
lower than forecasted synergy valuation

Internal Resistance to Management Turnover

• Integration of Airgain into TE Connectivity may be hindered by the
change in managerial oversight
 KEY PERSONNEL TO CONVINCE

CEO & CFO

• C
​ hief Executive Officer Jacob Suen and Chief Financial Officer David
Lyle will be offered a seat on TE Connectivity's board in addition to
being awarded an attractive compensation exit package 
• Years of industry and company experience will make both valuable
board members
MANAGEMENT TEAM

• Remaining members of management team will be awarded an

attractive compensation exit package

SHAREHOLDERS

• Offer price of $10.91 per share provides an attractive exit price for all
shareholders given recent trading of the target
• Airgain stock has experienced consistent and significant declines the
past year, with a 49.9% decrease from April 29, 2019 to April 26,
2020
• Cash offer prevents shareholder concerns about value of TE
Connectivity stock
APPENDI
X
APPENDIX: INCOME
STATEMENT
APPENDIX: DCF + VALUE OF SYNERGIES
APPENDIX: BETA REGRESSION
APPENDIX: WACC CALCULATION