Tallahassee, Fl 3/27/12 (StreetBeat) -- Oclaro, Inc. (Nasdaq: OCLR), a tier-one provider and innovator of optical communications and laser solutions, and Opnext, Inc. (Nasdaq: OPXT), a global leader in the design and manufacture of optical modules, components and subsystems, today announced that they have entered into a definitive agreement to merge in an all-stock transaction. Under the terms of agreement, Opnext shareholders will receive a fixed ratio of 0.42 shares of Oclaro common stock for every share of Opnext common stock they own.The Oclaro and Opnext merger is expected to mark a major transformation in the optical industry, bringing together over 30 years of combined telecom and datacom optical technology innovation. The merger will create a new industry leader in the fast-growing optical components and modules market, forecast to reach $9.2 billion in 2015.[1] The broad product portfolio, technology innovation, engineering resources, cost structure and strategic customer relationships of the combined company are expected to expand its opportunities for growth and to create long-term shareholder value.
Data-intensive applications such as video and cloud computing, and the proliferation of mobile devices, are driving the need for increased performance and bandwidth throughout the core optical networks, at the heart of the world's Internet traffic. These trends are also forcing enterprises and data centers to upgrade and deploy new data communications infrastructures.
As a result, traditionally separate telecom and datacom networks are converging, leveraging advanced optical networking technologies from companies such as Opnext and Oclaro. The combined company will be well positioned to capitalize on these trends to become the No. 1 supplier to the core optical networks with a strong leadership position in the fastest-growing 40G and 100G segment, which is expected to grow at a CAGR of 42% through 2015[2]. The broader product line resulting from the merger strengthens the combined company's position as a key supplier to existing and new customers.
"This merger clearly will be a unique and transformational opportunity for both Oclaro and Opnext," saidAlain Couder, chairman and CEO, Oclaro. "Our respective customers want to work with fewer, more strategic suppliers who can deliver the breadth of technologies they need. Through this merger, the companies' complementary and vertically-integrated product portfolios, scale, and heritage of technology innovation will put the merged company in that valued strategic partner and leadership role. By doing so, and at the same time saving significant costs, we also expect to generate substantially more long-term value for shareholders than either company could deliver alone."
In addition to the telecom and datacom markets, there is a large and growing opportunity for laser diodes in a range of high-growth industrial and consumer markets. Through this transaction, the combined company will be the largest supplier of laser diodes for industrial and consumer applications. With a substantial portfolio of products and technologies, the combined company is well positioned to accelerate innovation and inroads into these high-volume markets.
The combined heritage of Oclaro and Opnext comes from some of the leading optical technology innovators over more than 30 years, including Hitachi, Nortel, Alcatel, Marconi, Corning, Opnext, Bookham and Avanex.
"Opnext and Oclaro share a rich history bringing to market some of the industry's most advanced optical technology innovations over more than three decades," said Harry Bosco, chairman and CEO, Opnext. "I am excited by the unique opportunity that will be created by this combination for customers, shareholders and for the employees of the merged company, who will leverage this deep legacy of technology innovation to lead the optical components and modules market and to achieve critical mass in the industrial and consumer laser diode segments."
The combined company will be led by Alain Couder, who will serve as chairman and CEO. Upon closing,Harry Bosco will join the combined company's board of directors.
Transaction Details
Upon the close of the transaction, Opnext shareholders will own approximately 42% of the combined company.
The combined company is expected to achieve positive non-GAAP operating income in the first full quarter after the close and is expected to achieve annualized cost synergies of $35 million to $45 millionwithin 18 months of the close of the transaction. The company expects restructuring and system integration costs to total $20 million to $30 million.
The transaction is subject to customary closing conditions, including approval by the shareholders of both companies and the receipt of regulatory approvals in the U.S., and is expected to close within three to six months.
Oclaro and Opnext will each be filing the full text of the merger agreement with the Securities and Exchange Commission (the "SEC") on Form 8-K within four business days of the date of this release. Investors and security holders of each company are advised to review those filings for the full terms of the proposed combination, as well as any future filings made by the companies, including the Form S-4 Registration Statement and related Joint Proxy Statement/Prospectus. (See below under "Additional Information and Where to Find It").
Conference Call
The management teams of both companies will host a conference call today, March 26, 2012, at 5:00 p.m. ET/2:00 p.m. PT. To access the conference call, please dial 1-480-629-9760. A live webcast and accompanying presentation of the conference call will be available in the Investors section of Oclaro's website at www.oclaro.com and in the Investors section on Opnext's website at www.opnext.com. A joint slide presentation to be used in the conference call will be filed by each company with the SEC and posted to the investor relations page of each company's website prior to the conference call. An audio replay of the conference call will be available until April 2, 2012, 11:59 pm Eastern Time. To access the replay, please dial 1-858-384-5517 with pin 4527215.
Please contact www.thestreetbeat.com for interest in our latest investor relations platform the “CEO Interview Series” with its host Steve Kanaval. The package includes a one-on-one interview with a seasoned industry professional; published segment to our web site with embedded audio/video file; and a compressed file that can be easily e-mailed out to your current and/or potential investors. Please e-mail bflautt@gmail.com or call (662) 392-0740 for pricing and scheduling.
StreetBeat Disclaimer
No comments:
Post a Comment