Bookham and Avanex Agree to Merger
27 Gennaio 2009 - 10:36PM
PR Newswire (US)
New Company Will Be A Leader in Optical Solutions For Metro and
Long Haul Telecom Networks SAN JOSE, Calif. and FREMONT, Calif.,
Jan. 27 /PRNewswire-FirstCall/ -- Bookham, Inc. (NASDAQ:BKHM) and
Avanex Corporation (NASDAQ:AVNX) today announced that they had
reached a definitive agreement to merge in an all- stock
transaction. Avanex shareholders will receive 5.426 shares of
Bookham common stock for every share of Avanex common stock and
will own approximately 46.75% of the combined company. 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 $7 million of quarterly cost savings by the end of the
fourth full quarter after the close. The new company will have a
stronger balance sheet, benefiting from combined cash balances and
no outstanding debt. Restructuring costs associated with the
transaction are expected to be less than $7 million. 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 Alain Couder, president and CEO of Bookham. "There is
minimal product overlap between our businesses allowing us to
quickly expand sales opportunities and improve service to our
customers. In addition, both companies have strong technology
platforms and the best engineering teams that we expect will allow
us to drive innovation and expansion for both existing and new
growth areas." "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 Alain Couder who will serve as
President and CEO. The company is expected to have two telecom
divisions and one non-telecom division. The board of directors will
be composed of Alain Couder and three additional directors from the
Bookham board, and Giovanni Barbarossa and two additional directors
from the Avanex board. Transaction Details Under the terms of the
agreement signed on January 27, 2009, which has been approved by
both boards of directors, Avanex shareholders will receive, at a
fixed exchange ratio, 5.426 shares of Bookham common stock for
every share of Avanex common stock. Upon the close of the
transaction, Avanex shareholders will own approximately 46.75
percent of the combined company. Based on the closing price of
Bookham on January 26, 2009 the total consideration to Avanex
shareholders would be equivalent to $35.4 million or $2.17 per
share. 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, January 27, 2009, at 5:00 p.m. ET/2:00 p.m. PT. To
access the conference call, please dial (480) 248-5081, and
reference "Bookham and Avanex merger." A live webcast and
accompanying presentation of the conference call will be available
in the Investors section of Bookham's website at
http://www.bookham.com/ and in the Investors section on Avanex's
website at http://www.avanex.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 February 3, 2009. To access
the replay, please dial 1-303-590-3030, and use the access code
3965637. 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 September 18,
2008, and additional information regarding the directors and
executive officers of Avanex is also included in Avanex's proxy
statement for its 2008 Annual Meeting of Stockholders, which was
filed with the SEC on October 14, 2008, respectively. 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 San Jose, Calif.,
with leading edge chip fabrication facilities in the UK and
Switzerland, and manufacturing sites in the USA and China. To learn
more about Bookham, visit our web site at: http://www.bookham.com/.
Bookham and all other Bookham, Inc. product names and slogans are
trademarks or registered trademarks of Bookham, Inc. in the USA or
other countries. 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 Fremont, California. Avanex Corporation also
maintains facilities in Horseheads, New York; Shanghai, China;
Villebon Sur Yvette, France; San Donato, Italy; and Bangkok,
Thailand. To learn more about Avanex Corporation, visit our web
site at: http://www.avanex.com/. DATASOURCE: Bookham, Inc. CONTACT:
Jim Fanucchi of Summit IR Group Inc., +1-408-404-5400, , for
Bookham, Inc.; or Jerry Turin, Chief Financial Officer of Bookham,
Inc., +1-408-383-1400, ; or Mark Weinswig, Interim Chief Financial
Officer of Avanex, +1-510-897-4188, Web site:
http://www.bookham.com/ http://www.avanex.com/
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