CVC Capital Partners and Second Avenue Partners Announce First Joint Investment; CVC and Second Avenue Take Joint Stake in Malibu Networks

Business Wire, Nov 13, 2000

Business Editors, High-Tech Writers

LONDON and SEATTLE--(BUSINESS WIRE)--Nov. 13, 2000

CVC Capital Partners ("CVC") and Second Avenue Partners today announced that they are taking a joint stake in Malibu Networks, a leading developer of wireless technology for broadband networks.

This follows the announcement in May that CVC, a leading European private equity provider, was forming a strategic alliance with Second Avenue Partners, one of Seattle's most experienced New Economy teams.

CVC and Second Avenue Partners are investing $10 million in Malibu as part of the company's second round of venture funding. Malibu will also receive an additional $20 million from a consortium of investors, including two existing shareholders, Arch Venture Partners and Polaris Venture Partners. The funding will provide the necessary resources for the field trials of Malibu's wireless broadband IP systems in early 2001, and will be used to ramp up domestic and overseas operations as the company moves into its full production phase.

"This investment is a model example of the type of investment we are seeking through our alliance with Second Avenue Partners," said Marc St John, managing director, New Technology Business Development, CVC Capital Partners. "Malibu is addressing a rapidly growing, global marketplace and we believe that we can add significant value to the business by bringing a combination of strategic direction, hands-on management and global perspective."

"Malibu has significant potential in a sector that is beginning to attract investor interest," said Keith Grinstein, founding partner, Second Avenue Partners. "In a situation where rapid international roll-out is required, the combination of investment and technology expertise within CVC and Second Avenue Partners is a powerful one."

Based in Calabasas, California, Malibu has developed unique, proprietary technology that provides companies with superior and cost-effective access to broadband networks. By allocating bandwidth more efficiently, Malibu's software enables telecoms operators to offer an enhanced range of high quality voice and data communications services.

Broadband networks are fast becoming the industry standard for high-speed voice and data communications delivery. Fixed wireless broadband point to multipoint technology -- which is Malibu's area of expertise -- provides a highly cost effective way to deploy global broadband services. It is estimated that the broadband wireless market will grow ten-fold over the next four years.

About CVC Capital Partners

CVC is a leading independent equity provider in the United Kingdom and Continental Europe, specializing in large scale MBOs and MBIs. In 1998, CVC arranged European deals worth more than any other private equity provider, building on its previous seven-year record for completing the largest number of major MBOs/MBIs in Continental Europe (source: KPMG Corporate Finance).

Founded in 1981 as Citicorp's European private equity arm, in 1993 CVC carried out its own management buy-out and is independently owned by its management. CVC currently manages funds of (pound)2.5 billion, including Citigroup's private equity investments in Europe, and has acquired over 200 companies since 1981. CVC has offices in 10 European countries and 45 investment professionals.

Deals recently completed include Invensys Sealing Systems, BSN, Kappa Packaging and Acordis. CVC also has a number of Internet related investments including William Hill in the United Kingdom, Luckysurf.com in the United States and Aston IT Group in Denmark. For more information, visit www.cvceurope.com.

About Second Avenue Partners

Second Avenue Partners is a Seattle-based provider of management, strategy and capital for early stage companies. Its four partners -- Pete Higgins, Nick Hanauer, Keith Grinstein and Mike Slade -- have a long and successful operating track record in the Internet and wireless sectors, having respectively held senior management or consultancy positions with Microsoft, amazon.com, Nextel International and Apple Computer.

Together, they have established Second Avenue Partners as a foremost "mentor capitalist," providing hands-on, day-to-day support focused on a small number of early stage companies. Steve Jobs, chairman and CEO of Apple Computer, and Stuart Sloan, founder of Sloan Capital Companies, are also limited partners in Second Avenue Partners. For more information, visit www.secondave.com.

About Malibu Networks

Malibu has applied fundamental networking theory to the problem of transmitting IP protocols over wireless broadband. The result is a major protocol architecture, embodied in a complete system of wireless broadband products. Malibu is also pioneering the commercial use of OFDM, including the design of one of the world's first burst-mode OFDM modem chips. This advanced RF technology is highly resilient to multipath effects and interference, does not require line of sight, and is optimal for reliable transport of IP across wireless broadband.