It is expected that the combination will be Adjusted EBITDA accretive in
the first full quarter after the close of the transaction and will generate
Key strengths of the new company include: -- A complete portfolio of terminal and line product technologies critical for the metro and long haul markets -- Best in class telecom chips based on Indium Phosphide, Lithium Niobate and Gallium Arsenide -- Well positioned for 40Gbs and reconfigurable networks -- Ability to leverage new opportunities quickly within expanded customer base -- Resources to enable leading R&D investment in key product lines -- Ability to leverage both in-house and outsourced manufacturing capacity to maximize flexibility and gross margin opportunities -- $7 million of quarterly synergies by the end of the fourth full quarter after close, which is $28 million annualized -- Company to be led by Alain Couder as CEO and talented executives from both companies
"The combination of Bookham and Avanex creates synergies that we expect
will significantly improve financial performance faster than either of the two
companies could accomplish on a stand-alone basis," said
"The significant financial and technological advantages to combining the two companies will benefit our customers, employees, and shareholders, as well as the industry as a whole," said Giovanni Barbarossa, President and CEO of Avanex. "We expect that the combination of Avanex's next generation subsystem design and integration capabilities, enhanced with additional internal content from Bookham will deliver end-to-end product offerings to our customers at competitive prices."
The combined company will be led by
Transaction Details
Under the terms of the agreement signed on
The merger is subject to customary closing conditions including shareholder approval by both companies. Both companies will continue to operate their businesses independently until the close of the merger. The merger is expected to be completed within three to six months.
Citigroup Global Markets Inc. is acting as Bookham's financial advisor. Banc of America Securities, LLC is acting as Avanex's financial advisor.
Bookham and Avanex 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,
Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the timetable for completing the transaction, the benefits of the business combination transaction involving Bookham and Avanex, including potential synergies and cost savings and the timing thereof, future financial and operating results including Adjusted EBITDA in the first quarter following the transaction, quarterly synergies, the combined company's plans, cash balances together, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as "potential," "expected," "plan," "estimate," "intend," "will," or words of similar meaning. Such forward-looking statements are based upon the current beliefs and expectations of Bookham's and Avanex's management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond the control of Bookham and Avanex. Actual results may differ materially from the results anticipated in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, general business and economic conditions; the performance of financial markets; risks relating to the consummation of the contemplated merger, including the risk that required stockholder approval might not be obtained in a timely manner or at all or that other closing conditions are not satisfied; the failure to realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses or employees of Bookham and Avanex not be combined and integrated successfully, or such combination may take longer, be more difficult, time-consuming or costly to accomplish than expected; and operating costs and business disruption following the merger, including adverse effects on employee retention and on our business relationships with third parties. Additional factors that can cause the results to materially differ than those described in the forward-looking statements can be found in the most recent Form 10-Q, most recent Form 10-K and other periodic reports filed by Bookham and Avanex, with the Securities and Exchange Commission. Neither Bookham nor Avanex assumes any obligation or intends to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Additional Information and Where to Find It
This communication is being made in respect of the proposed business
combination involving Bookham and Avanex. In connection with the proposed
transaction, Bookham and Avanex plan to file documents with the SEC, including
the filing by Bookham of a Registration Statement on Form S-4 containing a
Joint Proxy Statement/Prospectus and each of Bookham and Avanex plan to file
with the SEC other documents regarding the proposed transaction. Investors and
security holders of Bookham and Avanex are urged to carefully read the Joint
Proxy Statement/Prospectus (when available) and other documents filed with the
SEC by Bookham and Avanex because they will contain important information
about the proposed transaction. Investors and security holders may obtain free
copies of these documents (when they are available) and other documents filed
with the SEC at the SEC's web site at http://www.sec.gov and by contacting
Bookham Investor Relations at (408) 404-5400 or Avanex Investor Relations at
(510) 897-4188. Investors and security holders may obtain free copies of the
documents filed with the SEC on Bookham's website at http://www.bookham.com or
Avanex's website at http://www.avanex.com or the SEC's website at
http://www.sec.gov. Bookham, Avanex and their respective directors and
executive officers may be deemed participants in the solicitation of proxies
with respect to the proposed transaction. Information regarding the interests
of these directors and executive officers in the proposed transaction will be
included in the Joint Proxy Statement/Prospectus described above. Additional
information regarding the directors and executive officers of Bookham is also
included in Bookham's proxy statement for its 2008 Annual Meeting of
Stockholders, which was filed with the SEC on
About Bookham
Bookham, Inc. is a leading provider of high performance optical products,
spanning from components to advanced subsystems. The company designs and
manufactures a broad range of solutions tailored for the telecommunications
optical infrastructure and other selected markets, including industrial, life
sciences, semiconductor, and scientific. The Company utilizes proprietary core
technologies and a vertically integrated manufacturing organization to provide
its customers with cost-effective and innovative devices, as well as flexible,
scalable product delivery. Bookham is a global company, headquartered in
Bookham and all other Bookham, Inc. product names and slogans are
trademarks or registered trademarks of Bookham, Inc. in the
About Avanex
Avanex Corporation is a leading global provider of Intelligent Photonic
Solutions(TM) to meet the needs of fiber optic communications networks for
greater capacity, longer distance transmissions, improved connectivity, higher
speeds and lower costs. These solutions enable or enhance optical wavelength
multiplexing, dispersion compensation, switching and routing, transmission,
amplification, and include network-managed subsystems. Avanex Corporation was
incorporated in 1997 and is headquartered in
SOURCE Bookham, Inc.