INFN Infinera Corporation

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

April 8, 2015

 

 

INFINERA CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware		001-33486		77-0560433
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

140 Caspian Court

Sunnyvale, CA 94089

(Address of principal executive offices, including zip code)

(408) 572-5200

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

x	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

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Item 8.01

Other Events.

Announcement of public offer to acquire outstanding shares of Transmode AB

On April 8, 2015, Infinera Corporation (the “Company”) issued a press release in Sweden and in the U.S. announcing the Company’s intent to combine with Sweden-based Transmode AB, a Swedish company (“Transmode”), pursuant to a public exchange offer to acquire all issued and outstanding shares of Transmode (the “Offer”). In the Offer, the Company is offering Transmode’s shareholders cash and common stock as follows: (i) with respect to approximately 72.48 percent of the Transmode shares exchanged by such shareholder, approximately 0.6492 new shares of Infinera’s common stock per Transmode share; and (ii) with respect to the remaining approximately 27.52 percent of the Transmode shares exchanged by such shareholder, approximately SEK 109 in cash per Transmode share. The board of directors of Transmode has unanimously recommended that Transmode’s shareholders accept the Offer.

If the Offer is accepted in its entirety, 13,037,196 shares of Infinera’s common stock (“Infinera Shares”) will be issued under the Offer, corresponding to approximately 10.1 percent of Infinera’s shares outstanding. Following completion of the Offer, if accepted in its entirety, former Transmode shareholders would hold Infinera Shares representing approximately 9.2 percent of the outstanding shares of and voting power in the combined company and approximately 8.7 percent of the combined company on a fully diluted basis.

The completion of the Offer is conditional upon,

 

1.

the Offer being accepted to such an extent that Infinera becomes the owner of shares in Transmode representing more than 90 percent of the total number of shares of Transmode;

 

2.

Infinera’s Registration Statement on Form S-4 in the United States, which will register the offer and issuance of the Infinera Shares, becoming effective under the Securities Act of 1933, as amended, and not being the subject of any stop order or proceeding seeking a stop order by the Securities and Exchange Commission (the “SEC”);

 

3.

the Infinera Shares to be issued under the Offer being approved for listing on the NASDAQ Global Select Market;

 

4.

there being no circumstances, which Infinera did not have knowledge of at the time of the announcement of the Offer, having occurred which would have a material adverse effect or could reasonably be expected to have a material adverse effect on Transmode’s sales, results, liquidity, equity ratio, equity or assets;

 

5.

neither the Offer nor the acquisition of Transmode being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of court or public authority, or any similar circumstance, which is actual or can reasonably be anticipated, and which Infinera could not reasonably have foreseen at the time of the announcement of the Offer;

 

6.

Transmode not taking any action that is likely to impair the prerequisites for making or completing the Offer;

 

7.

no information made public by Transmode or disclosed by Transmode to Infinera being materially inaccurate, incomplete or misleading, and Transmode having made public all information which should have been made public by it; and

 

8.

no other party announcing an offer to acquire shares in Transmode on terms more favorable to the shareholders of Transmode than the Offer.

Infinera reserves the right to withdraw the Offer in the event it becomes clear that any of the above conditions is not satisfied or cannot be satisfied. With regard to conditions 2 – 8, however, such withdrawal will only be made if the non-satisfaction is of material importance to Infinera’s acquisition of shares in Transmode.

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Infinera reserves the right to waive, in whole or in part, one or more of the conditions above, including with respect to condition 1 above, to complete the Offer at a lower level of acceptance.

If Infinera becomes the owner of more than 90 percent of the shares of Transmode, Infinera intends to initiate a compulsory acquisition procedure with respect to the remaining shares in Transmode under the Swedish Companies Act. In connection therewith, Infinera intends to initiate a delisting of the Transmode shares from Nasdaq Stockholm.

The largest shareholder in Transmode – Pod Investment AB (“Pod”) – holding in aggregate 9,223,140 Transmode shares, representing approximately 33 percent of the total number of shares and votes in Transmode, has undertaken to accept the Offer, subject to certain conditions, pursuant to the terms of an irrevocable undertaking agreement (the “Irrevocable Undertaking”). In the event that before the expiration of the acceptance period (including any extension) under the Offer a third party announces a public offer to acquire all the shares in Transmode for a price which exceeds the price in the Offer by more than eight (8) percent (the “8 Percent Hurdle”) and such offer is recommended by the Board of Directors of Transmode (a “Superior Offer”), and provided that Infinera has not publicly announced an increased Offer that is recommended by the Board of Directors of Transmode (an “Increased Offer”) no later than on the date preceding the last day of the acceptance period (excluding any extension of it) under the Superior Offer (the “Right to Match”), then Pod’s undertaking to accept the Offer shall lapse and Pod shall be entitled to withdraw any acceptance of the Offer and accept the Superior Offer. In case an Increased Offer is made and the Superior Offer is thereafter increased to exceed the Increased Offer and such increased Superior Offer is recommended by the Board of Directors of Transmode (an “Increased Superior Offer”), and provided that Infinera does not exercise its Right to Match, then Pod’s undertaking to accept the Offer shall lapse and Pod shall be entitled to withdraw any acceptance of the Offer and accept the Superior Offer. The 8 Percent Hurdle shall apply to a Superior Offer only (but not to any subsequent Increased Superior Offer), whereas the Right to Match shall apply to each and every Superior Offer and each and every Increased Superior Offer.

For the purposes of determining whether a Superior Offer exceeds the 8 Percent Hurdle, or, as the case may be, an Increased Superior Offer exceeds an Increased Offer, the following shall apply: (i) the part of the consideration that consists of listed securities under the Offer or, as the case may be, an Increased Offer shall be valued based on the Prevailing Conditions (as defined below) on the last completed trading day before announcement of the Offer or, as the case may be, the Increased Offer; (ii) if a Superior Offer or, as the case may be, an Increased Superior Offer includes a cash alternative coupled with a not all cash alternative, then the value of the cash alternative shall be elected for the determination of the offer value and any alternative forms of consideration shall be disregarded; and (iii) if the consideration under a Superior Offer or, as the case may be, an Increased Superior Offer consists (wholly or partly) of listed securities, such offer shall be valued based on the Prevailing Conditions (as defined below) on the last completed trading day before announcement of the Superior Offer or, as the case may be, the Increase Superior Offer. The “Prevailing Conditions” shall mean (i) the quotation or price (as derived from the relevant exchange) of Infinera’s or the third party’s securities, as relevant, at the close of business on the above specified trading day and (ii) if the currency of the consideration under an offer is not in SEK, the currency conversion shall be calculated based on the applicable currency/SEK exchange rate on the day immediately preceding the date the offer was publicly announced, as derived from the European Central Bank daily foreign exchange reference rate at close of business.

Pod’s undertaking to accept the Offer shall terminate automatically and be of no further force or effect if the Offer lapses or is withdrawn, or the undertaking has lapsed due to a Superior Offer in accordance with the above, i.e., in cases where Infinera has not exercised its Right to Match. Furthermore, all of Pod’s obligations under the undertaking will lapse, at the option of Pod, if (a) the Offer is not being declared unconditional before September 15, 2015; (b) a circumstance has occurred, which could not have been reasonably known or anticipated by Pod at the time of entering into the undertaking, which would have a material adverse effect or could reasonably be expected to have a material adverse effect on Infinera’s liquidity, sales, results, solidity, assets or equity; or (c) any information made public by Infinera or disclosed by Infinera to Pod or Transmode is materially inaccurate, incomplete or misleading in respects that could reasonably be expected to have a materially adverse effect on Infinera’s liquidity, sales, results, solidity, assets or equity.

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The Irrevocable Undertaking executed by Pod and Infinera is attached to this report as Exhibit 99.1.

In addition, Pod has executed a holding agreement (the “Holding Agreement”), pursuant to which Pod has agreed not to dispose of the Infinera shares received as consideration for the Transmode shares tendered in the Offer during a certain period (the “Holding Period”). The Holding Period will commence upon settlement of the Offer and will continue until all of the Infinera shares received have been released from the holding restrictions pursuant to the following: one-fifth (1/5) of the shares shall be released from the holding restrictions on the forty-fifth day after settlement of the Offer; and one-fifth (1/5) of the shares shall be released from the holding restrictions each month thereafter on the same day of the month as the day of the settlement of the Offer. Thomas J. Fallon, CEO of Infinera, and David F. Welch, Co-Founder of Infinera, have, subject to certain exemptions, entered into similar restrictions on their shares in Infinera.

The Holding Agreement executed by Pod is attached to this report as Exhibit 99.2.

The Company provided supplemental information regarding the Offer in connection with a presentation to analysts and investors in a conference call held on April 9, 2015 at 8:30 a.m. EDT. A copy of the investor presentation made available during the call is attached hereto as Exhibit 99.3. Supplemental information regarding the Offer was also provided by both Infinera and Transmode to Transmode’s employees in connection with Transmode’s all-hands employee meeting held on April 9 at 1:00 p.m. CET. Copies of Infinera’s and Transmode’s presentations are attached hereto as Exhibits 99.4 and 99.5, respectively. Copies of the Company’s press release announcing the Offer, which provides additional details on the terms of the Offer, and Transmode’s press releases announcing the recommendation of Transmode’s board of directors and other matters relating to the Offer, are filed herewith as Exhibits 99.6, 99.7 and 99.8.

Important additional information will be filed with the Securities and Exchange Commission (SEC)

This current report is neither an offer to purchase nor a solicitation of an offer to sell any shares. This current report is for informational purpose only. The Offer will not be made to, nor will exchanges be accepted from, or on behalf of, holders of shares in any jurisdiction in which the making of the exchange offer or the acceptance thereof would not comply with the laws of that jurisdiction. Infinera has not commenced the acceptance period for the exchange offer described in this current report.

Infinera intends to file a Registration Statement on Form S-4 with the SEC in connection with the proposed transaction. An offer document filed with the Swedish Financial Supervisory Authority related to the Offer will also be distributed to the shareholders of Transmode.

Shareholders of Transmode are urged to read the above referenced documents and materials carefully when such documents and materials become available because they contain important information about the transaction.

Shareholders of Transmode may obtain free copies of these documents and materials, any amendments or supplements thereto and other documents containing important information about Infinera and the transaction, once such documents and materials are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents and materials filed with the SEC by Infinera will also be available free of charge on Infinera’s website at http://www.infinera.com/ under the heading “SEC Filings” in the “Company—Investor Relations” portion of Infinera’s website. More information about the Offer, including the formal announcement of the Offer and the offer document to be filed with and approved by the Swedish Financial Supervisory Authority, can be found on www.infinera.se.

Forward-Looking Statements

Statements in this current report relating to future events, status and circumstances, including statements regarding future financial or operating performance, growth and other projections as well as benefits of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as “anticipates,” “expects,” “believes,” continue,” “intends,” “target,”

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“projects,” “contemplates,” “plans,” “seeks,” “estimates,” “could,” “should,” “feels,” “will,” “would,” “may,” “can,” “potential” or similar expressions or variations, or the negative of these terms. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, many of which are outside the control of Infinera. These risks and uncertainties include, but are not limited to, the risk that Transmode shareholders fail to tender more than 90 percent of Transmode’s outstanding shares, that any of the other closing conditions are not satisfied, and that the transaction may not close; the risk that Transmode’s and Infinera’s businesses will not be integrated successfully; the risk that synergies will not be realized or realized to the extent anticipated; the risk that Infinera following the transaction will not realize on its financing or operating strategies; the risk that litigation in respect of either company or the transaction could arise; and the risk that disruption caused by the Combined Company would make it difficult to maintain certain strategic relationships. These risks and uncertainties also include those identified under the heading “Risk Factors” in the Infinera Annual Report on Form 10-K for the year ended December 27, 2014, and filed with the SEC, any subsequent reports filed with the SEC by Infinera, and those risks and uncertainties that will be discussed in the Registration Statement on Form S-4 to be filed with the SEC at a future date by Infinera. We caution investors not to place considerable reliance on the forward-looking statements contained in this current report. You are encouraged to read Infinera’s filings with the SEC, available at www.sec.gov, for a discussion of these and other risks and uncertainties. Any forward-looking statements contained in this current report speak only as of the date on which they were made and Infinera has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.

 

Item 9.01

Financial Statements and Exhibits

 

(d)

Exhibits

 

99.1		Irrevocable Undertaking.
99.2		Holding Agreement.
99.3		Investor Presentation.
99.4		Infinera Presentation to Transmode.
99.5		Transmode Employee Presentation.
99.6		Press Release of Infinera Corporation dated April 8, 2015.
99.7		Press Release of Transmode AB dated April 9, 2015.
99.8		Press Release of Transmode AB dated April 9, 2015.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

						INFINERA CORPORATION
Date: April 9, 2015				By:		/s/ JAMES L. LAUFMAN
						James L. Laufman Senior Vice President and General Counsel

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Irrevocable Undertaking.
99.2		Holding Agreement.
99.3		Investor Presentation.
99.4		Infinera Presentation to Transmode.
99.5		Transmode Employee Presentation.
99.6		Press Release of Infinera Corporation dated April 8, 2015.
99.7		Press Release of Transmode AB dated April 9, 2015.
99.8		Press Release of Transmode AB dated April 9, 2015.

Exhibit 99.1

IRREVOCABLE UNDERTAKING

This irrevocable undertaking (this “Undertaking”) is made on 8 April 2015

BETWEEN:

 

(1)	Infinera Corporation, a company duly incorporated and organized under the laws of Delaware, with corporate registration number 3325877, having its principal office at 140 Caspian Court, Sunnyvale, CA 94089, the U.S. (“Offeror”); and

 

(2)	Pod Investment AB, a company duly incorporated and organized under the laws of Sweden, with corporate registration number 556744-9441, having its principal office at Box 5358, 102 49 Stockholm, Sweden (“Shareholder”).

Offeror and Shareholder are hereinafter collectively referred to as the “Parties” and individually as a “Party”.

BACKGROUND:

 

(A)

Offeror intends to make a recommended public offer to the shareholders in Transmode AB (publ) (“the Company”) to tender all their shares in the Company to the Offeror on the key terms and conditions set forth in the draft press release (the “Offer”) attached as Appendix A (the “Offer Announcement”). For the purposes hereof, the “Offer” extends to any revised offer on behalf of the Offeror.

 

(B)	Shareholder is the owner of 9,223,140 shares in the Company (the “Shares”) and has, in order to encourage the Offeror to make the Offer, agreed to make this irrevocable undertaking (the “Undertaking”).

IT IS AGREED as follows:

SHAREHOLDER’S UNDERTAKING

 

1.1

Shareholder represents and warrants that it is the owner of, and has all relevant authority to accept the Offer in respect of the Shares, which Shares are free and clear of encumbrances of any kind. The Shareholder further represents and warrants that the Shares include all of the Shareholder’s shares in the Company.

 

1.2

Subject to (i) the conditions precedent in clause 2, and (ii) the Shareholder having the benefit of any improvement of the Offer granted to other shareholders of the Company, the Shareholder hereby irrevocably undertakes to accept the Offer in respect of all Shares immediately prior to, but conditioned upon, the Offer being declared unconditional.

 

1.3	In the event that a third party before the expiration of the acceptance period (including any extension) under the Offer announces a public offer to acquire all the shares in the Company for a price which exceeds the price in the Offer by more than eight (8) per cent (the “8 Per

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Cent Hurdle”) and which is recommended by the Board of Directors of the Company (a “Superior Offer”), and provided that the Offeror has not publicly announced an increased Offer that is recommended by the Board of Directors of the Company (“Increased Offer”) no later than on the date preceding the last day of the acceptance period (excluding any extension of it) under the Superior Offer (the “Right to Match”), then this Undertaking shall lapse and the Shareholder shall be entitled to withdraw any acceptance of the Offer and accept the Superior Offer. In case an Increased Offer is made and the Superior Offer is thereafter increased to exceed the Increased Offer and such increased Superior Offer is recommended by the Board of Directors of the Company (an “Increased Superior Offer”), and provided that the Offeror does not exercise its Right to Match, then this Undertaking shall lapse and the Shareholder shall be entitled to withdraw any acceptance of offer and accept the increased Superior Offer.

 

1.4

For the purposes of determining whether a Superior Offer exceeds the 8 Per Cent Hurdle, or, as the case may be, an Increased Superior Offer exceeds an Increased Offer, the following shall apply: (i) the part of the consideration that consists of listed securities under the Offer or, as the case may be, an Increased Offer shall be valued based on the Prevailing Conditions (as defined below) on the last completed trading day before announcement of the Offer or, as the case may be, the Increased Offer; (ii) if the Superior Offer or, as the case may be, the Increased Superior Offer includes a cash alternative coupled with a not all cash alternative, then the value of the cash alternative shall be elected for the determination of the offer value and any alternative forms of consideration shall be disregarded; and (iii) if the consideration under the Superior Offer or, as the case may be, the Increased Superior Offer consists (wholly or partly) of listed securities, such offer shall be valued based on the Prevailing Conditions (as defined below) on the last completed trading day before announcement of the Superior Offer or, as the case may be, the Increase Superior Offer.

The “Prevailing Conditions” shall mean (i) the quotation or price (as derived from the relevant exchange) of the Offeror’s or the third party’s securities, as relevant, at the close of business on the above specified trading day and (ii) if the currency of the consideration under an offer is not in SEK, the currency conversion shall be calculated based on the applicable currency/SEK exchange rate on the day immediately preceding the date the offer was publicly announced, as derived from the European Central Bank daily foreign exchange reference rate at close of business.

For the avoidance of doubt, the 8 Per Cent Hurdle shall apply to a Superior Offer only (but not to any subsequent Increased Superior Offer), whereas the Right to Match shall apply to each and every Superior Offer and each and every Increased Superior Offer.

 

1.5	The Shareholder hereby irrevocably undertakes to not (i) offer, sell, transfer, charge, pledge or grant any option over or otherwise deal with or dispose of any of the Shares or any

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interest in any of the Shares, whether directly or indirectly, except to the Offeror under the Offer, (ii) accept (conditionally or unconditionally) any other offer in respect of any of the Shares by whatever means it is to be implemented, (iii) solicit or encourage proposals or offers from third parties for the acquisition of shares in the Company, (iv) propose or vote in favor of any other resolution, or take any action or make any statement, which could prejudice or frustrate the Offer or (v) enter into any agreement or arrangement (whether conditional or unconditional) to do any or all of the acts referred to in this Section 1.5.

 

1.6	For the avoidance of doubt, the Shareholder shall be entitled to any increased consideration in the Offer.

CONDITION PRECEDENT

 

2.1	Conditions precedent for this Undertaking to enter into force is that:

 

a)

the Offer is made through a public announcement of the Offer on or before 15 April 2015; and

 

b)

the Board of Directors of the Company recommends the Offer.

 

2.2	Should the conditions precedent under Section 2.1 above not be met, then the Shareholder will have no obligations hereunder.

TERMINATION

 

3.1	This Undertaking shall terminate automatically and be of no further force or effect if:

 

(i)

the Offer lapses or is withdrawn, or

 

(ii)

this Undertaking has lapsed due to a Superior Offer in accordance with Section 1.3 above, i.e. in cases where the Offeror has not exercised its Right to Match.

 

3.2	Furthermore, all of the Shareholder’s obligations hereunder will lapse, at the option of the Shareholder, if

 

(a)

the Offer is not being declared unconditional before 15 September 2015;

 

(b)

a circumstance has occurred, which could not have been reasonably known or anticipated by Shareholder at the time of entering into this Undertaking, which would have a material adverse effect or could reasonably be expected to have a material adverse effect on Offeror’s liquidity, sales, results, solidity, assets or equity; or

 

(c)

any information made public by the Offeror or disclosed by the Offeror to Shareholder or the Company is materially inaccurate, incomplete or misleading in respects that could reasonably be expected to have a materially adverse effect on the Offeror’s liquidity, sales, results, solidity, assets or equity.

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MISCELLANEOUS

 

4.1

Any public disclosure of the existence or contents of this Undertaking will need to be agreed in advance between the Parties, except (a) as required by applicable law in any relevant jurisdiction or stock exchange regulation or regulatory or governmental body to which either Party is subject, in which case the Party required to disclose information hereof shall to the extent reasonably practicable consult with the other Party prior to such disclosure, and (b) in the ordinary course in connection with the investor relations practices of the Parties. Notwithstanding the foregoing, the Shareholder agrees that this Undertaking may be (i) disclosed to the Company and/or (ii) made public by the Offeror in relation to the Offer in order to comply with applicable rules and regulations, including any rules and regulations applicable to the Offer or the Offeror in Sweden, the European Union, the United States or any other relevant jurisdiction.

 

4.2

The Parties acknowledge that each of them has full knowledge of the contemplated Offer and that the Offeror has been or will be provided with information by the Company relating to the Company and its business through a due diligence process. The Parties are further aware that each of the Company and the Offeror is a publicly traded company and that the discussions, negotiations and information relating to the Offer may constitute inside information under Swedish law, the laws of the United States and/or other applicable law.

 

4.3

To the extent the Offeror obtains an undertaking to accept the Offer from other shareholders of the Company on terms more favorable to that shareholder than those which apply to the Shareholder under this Undertaking, such more favorable terms shall apply in relation to the Shareholder as if agreed between the Offeror and the Shareholder.

 

4.4

Each of the Parties confirms that this Undertaking represents the entire understanding and constitutes the whole agreement between the Parties in relation to its subject matter and supersedes all prior agreements and understandings, whether oral or written, between the Parties with respect to the subject matter hereof.

 

4.5

This Undertaking shall be binding upon and inure to the benefit of the successors of the Parties but shall not be assignable by any of the Parties without the prior written consent of the other Party. This Undertaking is not intended to, and does not, confer upon any person other than the Parties hereto any rights or remedies hereunder.

 

4.6

If any provision of this Undertaking or the application of it shall be declared or deemed void, invalid or unenforceable in whole or in part for any reason, the Parties shall amend this Undertaking as shall be necessary to give effect to the spirit of this Undertaking so far as possible. If the Parties fail to amend this Undertaking, the provision which is void, invalid or unenforceable, shall be deleted and the remaining provisions of this Undertaking shall continue in full force and effect.

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4.7	Nothing in this Undertaking shall be construed as an obligation for the Offeror to make or complete the Offer.

 

4.8	If the Offeror extends the acceptance period of the Offer and/or increases the offer price in the Offer and/or otherwise revises the Offer, this Agreement shall apply mutatis mutandis to such revised offer.

GOVERNING LAW AND DISPUTES

This Undertaking shall be governed by and construed in accordance with the laws of Sweden. Any dispute, controversy or claim arising out of, or in connection with, this Undertaking, or the breach, termination or invalidity of the Undertaking, shall be settled by arbitration in accordance with the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce. The place of arbitration shall be Stockholm, Sweden. The language to be used in the arbitral proceedings shall be English.

 

 

This Undertaking has been duly executed in two (2) original copies, of which each of the Parties has taken one (1) copy.

 

Place:

Stockholm

Place:

Date:

8 April, 2015

Date:

8 April, 2015

POD INVESTMENT AB

INFINERA CORPORATION

/s/ Axel Roos

/s/ Brad Feller

By:

Axel Roos

By:

Brad Feller

/s/ Tom Nyman

By:

Tom Nyman

Exhibit 99.2

HOLDING AGREEMENT

April 8, 2015

Infinera Corporation

140 Caspian Court,

Sunnyvale, CA 94089

Ladies and Gentlemen:

Infinera Corporation, a Delaware corporation (the “Offeror”), is considering making a public offer to acquire all outstanding shares in Transmode AB, a corporation organized under the laws of Sweden (the “Company”), pursuant to which all of the issued and outstanding shares of capital stock of the Company (“Company Shares”) would be exchanged for (i) shares of common stock, par value $0.001 per share, of Infinera Corporation (the “Offeror Shares”) and (ii) a cash payment (the “Offer”).

As a material inducement to the Offeror to make the Offer, the undersigned shareholder (“Shareholder”) hereby agrees that during the period specified in the following paragraph (the “Holding Period”), Shareholder will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the Offeror Shares issued to Shareholder pursuant to the Offer in exchange for Shareholder’s Company Shares (the “Subject Shares”) or securities convertible into or exchangeable or exercisable for any Subject Shares, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of the Subject Shares, whether any such aforementioned transaction is to be settled by delivery of the Subject Shares or such other securities, in cash or otherwise, or publicly disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any such transaction, swap, hedge or other arrangement, without, in each case, the prior written consent of the Offeror. Notwithstanding the foregoing, (i) for the avoidance of doubt, there shall be no restriction on the vesting of any Subject Shares or securities convertible into or exchangeable or exercisable for any Subject Shares or the exercise of any options or conversion rights with respect to such securities, in each case so long as the Subject Shares so released from vesting or so received following an exercise of options or conversion rights are held by the Shareholder and not themselves offered, sold, contracted to sell, pledged or otherwise disposed of, directly or indirectly, (ii) there shall be no restriction on the transfer of Subject Shares or securities convertible into or exchangeable or exercisable for any Subject Shares upon a vesting event or exercise of the Offeror’s securities to cover tax withholding obligations of the Shareholder in connection with such vesting or exercise and (iii) Shareholder may transfer Subject Shares as a distribution or distributions to partners, members or shareholders of Shareholder, provided that Shareholder is a limited partnership, limited liability company, corporation or similar entity and the distributees thereof agree to be bound in writing by the terms of this agreement (this “Agreement”) prior to such distribution. Furthermore, subject to compliance with Shareholder’s obligations under that certain Irrevocable Undertaking entered into substantially concurrently with this Agreement, nothing herein shall prevent Shareholder from accepting any public takeover/tender offer or similar offer made to all shareholders of the Offeror.

The Holding Period will commence upon the exchange of Shareholder’s Company Shares for Offeror Shares (the “Effective Date”) and shall continue with respect to the Subject Shares as follows, until all of the Subject Shares have been released from the restrictions set forth in this Agreement (such restrictions, the “Transfer Restrictions”):

 

•

One-fifth (1/5th) of the Subject Shares shall be released from the Transfer Restrictions on the forty-fifth (45th) day after the Effective Date; and

 

•

one-fifth (1/5th) of the Subject Shares shall be released from the Transfer Restrictions each month thereafter on the same day of the month as the Effective Date (and if there is no corresponding day, on the last day of the month).

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Shareholder also agrees and consents to the entry of stop-transfer instructions with the Offeror’s transfer agent and registrar against the transfer of the Subject Shares held by Shareholder except in compliance with the foregoing restrictions. The Offeror undertakes to take such actions, if any, in relation to the transfer agent and registrar or otherwise that might be necessary for the Offeror to take in order to for the Subject Shares to be released from the Transfer Restrictions as per the dates specified above, or which might facilitate such release.

Substantially concurrently with the execution of this Agreement, each of Thomas J. Fallon and David F. Welch, who are each shareholders of the Offeror (the “Other Shareholders”), have entered into a Holding Agreement with Offeror (each a “Holding Agreement,” and collectively, together with this Agreement, the “Holding Agreements”), pursuant to which the Other Shareholders have agreed to certain transfer restrictions on all shares, warrants, options or other instruments convertible into shares issued by the Offeror held or controlled by Mr. Fallon and Mr. Welch directly or indirectly (defined as “Subject Shares” in each other Holding Agreement, and herein as the “Other Subject Shares” and together with the Subject Shares covered by this Agreement, the “Holding Shares”). The Offeror undertakes to ensure that the transfer restrictions agreed to by Mr. Fallon and Mr Welch in their respective Holding Agreement are no less restrictive than the Transfer Restrictions under this Agreement and are in force for a restricted period that begins when Shareholder signs the Irrevocable Undertaking referred to above and ends at the end of the Holding Period. Notwithstanding the foregoing, the Other Shareholders shall not be restricted from effecting dispositions of Other Subject Shares through their respective trading plans pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended, that take place prior to May 1, 2015. To the extent that any Holding Shares are released from the restrictions under any of the Holding Agreements prior to the end of the Holding Period, the number of Holding Shares so released early (measured at each such early release) from the transfer restrictions shall be allocated pro rata among the Subject Shares and all Other Subject Shares, provided however that the Offeror undertakes to ensure that no such early release under the Holding Agreement entered into by Mr. Fallon and Mr Welch respectively is agreed without prior written consent of Shareholder. Should no such Holding Agreement be validly entered to by the Other Shareholders, or if this paragraph or such Holding Agreement is not complied with by the Other Shareholders or the Offeror, then this Agreement shall lapse and the Transfer Restrictions hereunder no longer have any effect. For the avoidance of doubt, the Holding Agreements for the Other Shareholders will lapse and terminate in the event that the Offer is withdrawn following the failure of any of the conditions thereto.

This Agreement will lapse and terminate in the event that the Offer is withdrawn following the failure of any of the conditions thereto.

The Offeror and Shareholder, in addition to being entitled to exercise all rights granted by law (including monetary damages, if any), shall be entitled to specific performance of their rights under this Agreement. The Offeror and Shareholder agree that monetary damages would not be adequate compensation for any loss incurred by reason of breach of the provisions of this Agreement and hereby agree to waive in any action for specific performance the defense that a remedy at law would be adequate or that there is need for a bond.

No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by the Shareholder and the Offeror. No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time. Notwithstanding the foregoing, Shareholder agrees that the Offeror may unilaterally waive in whole or in part, or otherwise modify in a manner that is not adverse to Shareholder, the restrictions of this Agreement.

No agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof.

This Agreement shall be governed by, and construed in accordance with, the laws of the State of Delaware, without regard to applicable principles of conflicts of laws thereof.

This Agreement shall inure to the benefit of, and be binding upon, the successors and assigns of the Offeror and Shareholder.

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, the undersigned has executed, or has caused to be executed, this Agreement on the date first written above.

 

 

Agreed to and Accepted:

INFINERA CORPORATION

/s/ Brad Feller

Authorized Signature/s

Brad Feller

Names of Authorized Signatory/ies

CFO

Title/s

[SIGNATURE PAGE TO HOLDING AGREEMENT]

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Exhibit 99.6

 

Infinera Announces Offer to Acquire Transmode

Acquisition Accelerates Metro Packet-Optical Strategy

and Establishes End-to-End Portfolio

 

•

Complementary product offering of long-haul, metro and Cloud that addresses the breadth of the DWDM market – forecast to reach $15B in 20191

 

•

Aligns Infinera’s #1 position in 100G WDM (ex-China) with Transmode’s #1 position in metro packet optical in EMEA

 

•

Timing enables combined company to capitalize on increased expected spending on transport within metro infrastructures

 

•

Expected to be accretive to non-GAAP EPS in 2016

Sunnyvale, Calif. and Stockholm, Sweden – April 8, 2015 – Infinera (NASDAQ: INFN), announced its offer to acquire Transmode, a leader in metro packet-optical networking through a recommended public offer to the shareholders of Transmode (the “Offer”). Transmode is headquartered in Stockholm, Sweden, and listed on Nasdaq Stockholm (TRMO).

The Board of Directors of Transmode has unanimously recommended to Transmode’s shareholders to accept the Offer. Pod Investment AB, the largest shareholder, which holds approximately 33 percent of the total shares and voting rights in Transmode, has undertaken to accept the Offer subject to customary conditions.

Complementing Infinera’s strength in the long-haul optical transport market and its early lead in the metro Cloud market, Transmode’s suite of metro core, edge and access solutions will allow Infinera to address the entire end-to-end WDM market and to capitalize on the transition of major 100G metro aggregation deployments expected by industry analysts to commence in 2016. Transmode’s products provide a rich set of application specific features including broadband aggregation, mobile backhaul and fronthaul along with business Ethernet MEF certifications. Both companies bring complementary customers and technology with Transmode positioned primarily in metro applications in Europe and Infinera historically positioned in long-haul and metro cloud, particularly in North America.

“The acquisition of Transmode accelerates the realization of our long held vision of providing an end-to-end portfolio of world class optical transport products. Further, the combination ensures we are well positioned to be a leading provider in the metro aggregation market as this market transitions to 100G,” said Tom Fallon, CEO of Infinera. “Transmode’s services-rich metro platforms, broad European customer base and profitable business model are naturally complementary to Infinera. We are also excited to have the Transmode team join Infinera and leverage our shared cultures of customer first, product excellence and profitability.”

 

1	Source: Infonetics Q4 2014 Market Forecast

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“Drawing on the complementary and synergistic skill sets of Infinera and Transmode, the combined company will be able to compete more effectively, develop differentiated and advanced products, and provide greater value to its most important stakeholders – customers, investors and employees,” said Karl Thedéen, CEO of Transmode.

Under the terms of the Offer, for every 10 shares of Transmode, shareholders will receive SEK 300 in cash and 4.705 Infinera shares. The purchase price implies a price per share of approximately SEK 109, and a total equity value for Transmode of approximately $350 million. In aggregate, Infinera will deliver approximately $96 million in cash, funded from its balance sheet, and will issue approximately 13.0 million new Infinera shares to Transmode shareholders. As of December 27, 2014, Infinera’s total cash holdings were approximately $391 million. Post-transaction, Transmode shareholders will own 8.7 percent of the combined company on a fully diluted basis. The acquisition has been approved by the board of directors of Infinera, and unanimously recommended by the board of directors of Transmode.

The Offer is expected to close in the third quarter of Infinera’s fiscal year 2015, subject to certain closing conditions, including acceptance by more than 90 percent of the total number of shares of Transmode and other customary conditions. The transaction is expected to be neutral to slightly dilutive to Infinera’s non-GAAP earnings in the second half of 2015, and accretive to Infinera’s non-GAAP earnings in 2016.

Morgan Stanley & Co. LLC is acting as exclusive financial adviser to Infinera, along with Mannheimer Swartling and Wilson Sonsini Goodrich & Rosati, P.C., who are serving as legal advisers. Lazard is acting as financial adviser to Transmode, along with Hannes Snellman, who serves as legal adviser.

Infinera will host a conference call to discuss the Offer on April 9, 2015 at 5:30 a.m. Pacific Daylight Time (2:30 p.m. Central European Time). Interested parties may join the conference call by dialing 1-800-593-9940 (within the U.S.) or +1-630-395-0029 (outside of the U.S.). The participant passcode is PIC. The Audio Webcast will also be available at http://investors.infinera.com. The telephone replay will be available 1 hour after the end of the call by dialing 1-866-403-7095 (within the U.S.) or +1-203-369-0567 (outside of the U.S.). There is no replay passcode.

This is not the formal announcement of the Offer for Transmode. The formal announcement of the Offer, which has been drawn up and made public in accordance with Swedish laws and regulations, is attached hereto and can, together with other information about the Offer, be found on www.infinera.se.

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Infinera Contacts:

 

Media (Europe): VERO Communications Johan Tamsen Tel. +46 (0)8 611 38 30 johan@vero.se		Investors (Europe): Morgan Stanley & Co International plc Erik Tregaard Tel. +46 (0)8 678 96 00 Erik.tregaard@morganstanley.com
Media (Rest of World): Anna Vue Tel. +1 (916) 595-8157 avue@infinera.com		Investors (Rest of World): Jeff Hustis Tel: +1 (408) 213-7150 jhustis@infinera.com

About Infinera

Infinera provides Intelligent Transport Networks for network operators, enabling reliable, easy to operate, high-capacity optical networks. Infinera leverages its unique large scale photonic integrated circuits to deliver innovative optical networking solutions for the most demanding network environments. Intelligent Transport Networks enable carriers, Cloud network operators, governments and enterprises to automate, converge and scale their data center, metro, long-haul and subsea optical networks. To learn more about Infinera visit www.infinera.com, follow us on Twitter @Infinera and read our latest blog posts at blog.infinera.com.

About Transmode

Transmode is a global provider of packet-optical networking solutions that enable fixed line and mobile network operators to cost effectively address the capacity needs created by the rapid growth in video and data traffic. These solutions are important building blocks in next-generation high-speed optical networks that support services such as broadband backhaul, mobile data backhaul, video delivery services and cloud computing. Find out more at www.transmode.com.

Forward Looking Statements

Statements in this press release relating to future events, status and circumstances, including statements regarding future financial and operating performance, growth, expected synergies and timing of the closing of the transaction, are forward-looking statements. These statements are not guarantees of results and should not be considered as an indication of future activity or future performance. Actual results may vary materially from these expectations as a result of various risks and uncertainties. These risks and uncertainties include, but are not limited to, the risk that Transmode shareholders fail to tender more than 90 percent of Transmode’s outstanding shares, that any of the other closing conditions are not satisfied, and that the transaction may not close; the risk that Transmode’s and Infinera’s businesses will not be integrated successfully; the risk that synergies will not be realized or realized to the extent anticipated; the risk that the combined companies will not realize on its financing or operating strategies; the risk that litigation in respect of either company or the transaction could arise; and the risk that disruption caused by the combined companies would make it difficult to maintain certain strategic relationships. These risks and uncertainties also include those risks and uncertainties that will be discussed in the offer document to be filed with the Swedish Financial Supervisory Authority and in the Registration Statement on Form S-4 to be filed with the Securities and Exchange Commission, those risks and uncertainties identified under the heading “Risk Factors” in the Infinera Annual Report on Form 10-K for the year ended December 27, 2014, and filed with the SEC, and those risks and uncertainties identified in any subsequent reports filed with the SEC by Infinera. We caution investors not to place considerable

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reliance on the forward-looking statements contained in this press release. Any forward-looking statements contained in this press release speak only as of the date on which they were made and Infinera has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.

Important Additional Information

This communication is neither an offer to purchase nor a solicitation of an offer to sell any shares. This communication is for informational purpose only. The Offer will not be made to, nor will exchanges be accepted from, or on behalf of, holders of shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not comply with the laws of that jurisdiction. The acceptance period for the Offer for shares of Transmode described in this communication has not commenced.

In connection with the proposed combination of Infinera and Transmode, Infinera will file an offer document with the Swedish Financial Supervisory Authority and a prospectus and a Registration Statement on Form S-4 with the SEC.

Shareholders of Transmode should read the above referenced documents and materials carefully when such documents and materials become available because they contain important information about the transaction.

Shareholders of Transmode may obtain free copies of these documents and materials, any amendments or supplements thereto and other documents containing important information about Infinera and the transaction, once such documents and materials are filed or furnished, as applicable, with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents and materials filed with the SEC by Infinera will also be available free of charge on Infinera’s website at http://www.Infinera.com/ under the heading “SEC Filings” in the “Company—Investor Relations” portion of Infinera’s website. More information about the Offer, including the formal announcement of the Offer and the offer document to be filed with and approved by the Swedish Financial Supervisory Authority, can be found on www.infinera.se.

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The Offer is not being made, and this press release may not be distributed, directly or indirectly, in or into, nor will any tender of shares be accepted from or on behalf of holders in, Australia, Hong Kong, Japan, Canada, New Zealand or South Africa, or any other jurisdiction in which the making of the Offer, the distribution of this press release or the acceptance of any tender of shares would contravene applicable laws or regulations or require further offer documents, filings or other measures in addition to those required under Swedish and U.S. law.

This press release has been published in Swedish and English. In the event of any discrepancy in content between the language versions, the Swedish version shall prevail.

PRESS RELEASE, 9 April 2015 (CET)

Infinera announces a recommended public offer to the shareholders of Transmode – seeking to broaden network capabilities and geographic presence

Infinera Corporation (NASDAQ: INFN) – a provider of Intelligent Transport Networks for network operators, enabling reliable, easy to operate, high-capacity optical networks – (“Infinera”) announces a recommended public offer to the shareholders of Transmode AB (“Transmode”) to tender all their shares in Transmode to Infinera (the “Offer”). The total Offer consideration consists of a mixture of cash and shares of common stock in Infinera, which values each Transmode share at SEK 109. The total Offer value corresponds to approximately SEK 3,020 million. Transmode’s shares are listed on Nasdaq Stockholm, Mid Cap. The Offer accelerates Infinera’s vision of providing the world’s best optical equipment across the entire dense wavelength division multiplexing (“DWDM”) market. Combined, Infinera and Transmode will have an end-to-end product portfolio and expect to realize financial synergies from their complementary customer bases and product portfolios, as well as certain operational synergies.

The Offer in brief

 

•

The Offer consideration values each Transmode share at SEK 1092 and the total Offer value represents approximately SEK 3,020 million3.

 

•

The total Offer consideration consists of a mixture of cash and shares of common stock in Infinera (“Infinera Shares”). Infinera is offering each Transmode shareholder:

 

•

in respect of approximately 72.48 percent of the Transmode shares tendered by such shareholder: approximately 0.6492 Infinera Shares per Transmode share; and

 

2	Based on USD 19.43, which was the closing price for Infinera Shares (as defined below) on 8 April 2015 (the last trading day prior to announcement of the Offer), i.e., SEK 167.90 based on a SEK/USD mid exchange rate published by the Swedish Central Bank (Sw. Riksbanken) on 8 April 2015 (of 8.6414).

3	Based on 27,709,236 outstanding shares in Transmode (i.e., excluding 79,440 own shares held in treasury by Transmode). The total Offer value corresponds to approximately USD 350 million, based on a SEK/USD exchange rate of 8.6414.

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•

in respect of the remaining approximately 27.52 percent of the Transmode shares tendered by such shareholder: SEK 109 in cash per Transmode share.

 

•

Accordingly, for every 10 Transmode shares tendered, each Transmode shareholder will receive SEK 300 in cash and approximately 4.705 Infinera Shares.

 

•

If Transmode pays dividends, including the dividend of SEK 1.95 per share as proposed by the Transmode Board of Directors on 5 February 2015, or makes any other distributions to its shareholders, with a record date occurring prior to the settlement of the Offer, the Offer consideration will be reduced accordingly (please refer to footnote 8 below).

 

•

The Offer represents a premium of:

 

•

approximately 46 percent compared to the six month volume-weighted average share price of SEK 74.80 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer;

 

•

approximately 32 percent compared to the three month volume-weighted average share price of SEK 82.75 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer;

 

•

approximately 20 percent compared to the one month volume-weighted average share price of SEK 90.58 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer; and

 

•

approximately 13 percent compared to the closing share price of SEK 96.50 for the Transmode share on Nasdaq Stockholm on 8 April 2015, the last trading day prior to announcement of the Offer.

 

•

The Offer implies a ratio of approximately 2.9 times Enterprise Value to Fiscal Year 2014 sales (EV/Sales) of Transmode and a ratio of approximately 49 times the value of the Offer to Transmode’s Fiscal Year 2014 earnings (P/E).

 

•

The Board of Directors of Transmode unanimously recommends that Transmode shareholders accept the Offer.4 The Transmode Board of Directors has obtained a fairness opinion from Lenner & Partners regarding the Offer, according to which the Offer is fair from a financial point of view for the shareholders in Transmode.

 

•

Pod Investment AB (“Pod”), which owns approximately 33 percent of the shares and votes in Transmode, has undertaken to accept the Offer, subject to certain conditions.

 

 

4

Since Pod Investment AB has entered into an undertaking to tender its shares in Transmode in the Offer (please see “Undertaking to accept the Offer and lock-up undertaking” below), Board members Tom Nyman, Chairman of the Board of Transmode and Director of Pod Investment AB, and Axel Roos, Director of the Board of Transmode and CEO and Director of Pod Investment AB, have, due to a conflict of interest, not participated in Transmode’s Board of Directors’ handling of, or decisions relating to, the Offer.

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•

If the Offer is accepted in its entirety, approximately 13.0 million Infinera Shares will be issued under the Offer, corresponding to approximately 10.1 percent of Infinera’s shares outstanding. Following completion of the Offer, if accepted in its entirety, former Transmode shareholders would hold Infinera Shares representing approximately 9.2 percent of the outstanding shares of and voting power in the combined company and approximately 8.7 percent of the combined company on a fully diluted basis.5

 

•

The combination of Infinera and Transmode (the “Combined Company”) will have a portfolio of products to address the entire DWDM market across Metro, Long Haul and Subsea. The combination is expected to accelerate Infinera’s ability to more fully address the fast growing 100G Metro market and enable Transmode to better access opportunities outside Europe.

 

•

Multiple synergies are expected to be realized as a result of the Combined Company, due in part to the fact that the companies’ customer bases have minimal overlap, and also due to the Combined Company being well positioned to provide a comprehensive solution globally. The Combined Company is also expected to be able to leverage cost efficiencies, including the integration of Infinera’s Photonic Integrated Circuits (“PICs”) into certain Transmode products, negotiating leverage from higher volumes with third-party suppliers and to a lesser extent, operating expense synergies by avoiding duplicative costs.

 

•

The Offer is not subject to any financing conditions. Infinera will finance the cash portion of the Offer consideration through its existing cash resources.

 

•

Infinera has initiated discussions with Nasdaq Stockholm and is evaluating whether to apply for a secondary listing on Nasdaq Stockholm, in addition to its current listing on the NASDAQ Global Select Market in the United States.

 

•

The Offer does not require pre-clearance filing with competition authorities.

 

•

The acceptance period of the Offer is expected to run from 26 June 2015 – 17 July 2015.

Comments from Infinera

“The acquisition of Transmode accelerates the realization of our long held vision of providing an end-to-end portfolio of world class optical transport products. Further, the combination ensures we are well positioned to be a leading provider in the metro aggregation market as this market transitions to 100G,” said Tom Fallon, CEO of Infinera. “Transmode’s services-rich metro platforms, broad European customer base and profitable business model are naturally complementary to Infinera. We are also excited to have the Transmode team join Infinera and leverage our shared cultures of customer first, product excellence and profitability.”

 

 

5	Based on 27,709,236 outstanding shares in Transmode (i.e., excluding 79,440 own shares held in treasury by Transmode) and 129,093,644 outstanding shares in Infinera as of 28 March 2015.

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Comments from Transmode and Pod

“The independent members of the Board of Directors of Transmode have unanimously decided to recommend the offer from Infinera and see benefits in the combination. The share portion of the consideration allows Transmode shareholders to take part in the anticipated benefits of the combination,” said Helena Nordman-Knutson, spokesperson for the independent Transmode Board.

“Drawing on the complementary and synergistic skill sets of Infinera and Transmode, the combined company will be able to compete more effectively, develop differentiated and advanced products, and provide greater value to its most important stakeholders – customers, investors and employees,” said Karl Thedéen, CEO of Transmode.

“Pod believes in the long term strategic rationale of the combination and we have together with Infinera’s CEO Tom Fallon and President and Co-Founder David F. Welch, entered into a lock-up agreement to show our commitment,” commented Tom Nyman and Axel Roos from Pod.

Background and reasons for the Offer

Market analysts expect the 100G Metro market to accelerate in 2016. Anticipating that event, Infinera has previously announced its intentions to introduce a Metro Core Aggregation product by the end of 2015 that would address a portion of that market. The Combined Company’s product portfolio will be able to address the breadth of the Metro market by the time major buying decisions commence.

There is minimal customer overlap between Infinera and Transmode. Infinera’s historical strength is in the North American long-haul market, while Transmode’s is in the European Metro market. The Combined Company will be able to more fully address the DWDM market and capitalize on the companies’ respective geographical strengths.

The Combined Company will have an end-to-end product portfolio to address the entire DWDM market. Historically, certain large Service Providers (as defined below) have shown themselves to value vendors with end-to-end portfolios.

Infinera develops and manufactures its products utilizing a vertically integrated business model in which it owns a significant portion of its manufacturing facilities and technologies. Over time, the Combined Company will seek to integrate Infinera’s technologies (e.g., PICs, DSPs, SDN, etc.), where applicable, into the Transmode family of products, which in turn will add value and drive down the cost structure. Additionally, the Combined Company is expected to have access to more favorable pricing from third-party suppliers due to higher purchase volumes. The Combined Company should also see efficiencies in its operating expenses by avoiding duplicative costs.

Finally, Infinera and Transmode have both enjoyed strong gross and operating margin results compared to its industry peers. Both companies share disciplined cultures focused on designing for cost and being disciplined in pricing, allowing for a profitable business.

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Management and employees

Infinera recognizes the skills and capabilities of Transmode’s management and employees and wishes to maintain an excellent relationship with them. For the near-term, Infinera does not intend to make any material changes to Transmode’s employees or to Transmode’s existing organization and operations, including the terms of employment and locations of the business. Each company’s engineering structure is anticipated to remain substantively intact and Infinera intends to have Transmode’s current CEO lead the Metro Aggregation business operations of the Combined Company. For the long-term, the optimal structures of each function will be determined during the period following the completion of the Offer and the creation of the Combined Company, after an assessment of the Combined Company’s optimal structure and staffing.

Infinera’s philosophy is to be market competitive with respect to the delivery of compensation and benefits to its employees globally, and accordingly, Infinera intends to administer such programs consistent with its current practice.

The Offer

The total Offer consideration consists of a mixture of cash and Infinera Shares, which values each Transmode share at SEK 109⁶.

Infinera is offering each Transmode shareholder:⁷

 

•

in respect of approximately 72.48 percent of the Transmode shares tendered by such shareholder: approximately 0.6492 Infinera Shares per Transmode share (the “Share Consideration”), equivalent to a value of approximately SEK 109 per Transmode share8; and

 

•

in respect of the remaining approximately 27.52 percent of the Transmode shares tendered by such shareholder: SEK 109 in cash per Transmode share (the “Cash Consideration”).

Accordingly, for every 10 Transmode shares tendered, each Transmode shareholder will receive SEK 300 in cash and approximately 4.705 Infinera Shares.

If Transmode pays dividends, including the dividend of SEK 1.95 per share as proposed by the Transmode Board of Directors on 5 February 2015, or makes any other distributions to its shareholders, with a record date occurring prior to the settlement of the Offer, the Offer consideration will be reduced accordingly.⁹

 

6	Based on USD 19.43, which was the closing price for Infinera Shares on 8 April 2015 (the last trading day prior to announcement of the Offer), i.e., SEK 167.90 based on a SEK/USD exchange rate of 8.6414.

7

Certain numbers are rounded. The actual numbers that will be used to calculate the consideration for accepting Transmode shareholders are as follows: (i) For the rounded number 72.48 percent, the exact number is 72.4770642201835 percent, (ii) for the rounded number 27.52 percent, the exact number is 27.5229357798165 percent, and (iii) for the rounded number 0.6492 Infinera Shares, the exact number is 0.64919594997022 Infinera Shares.

8	Based on USD 19.43, which was the closing price for Infinera Shares on 8 April 2015 (the last trading day prior to announcement of the Offer), i.e., SEK 167.90 based on a SEK/USD exchange rate of 8.6414.

9

Assuming a dividend distribution of SEK 1.95 per share (as proposed by the Transmode Board of Directors on 5 February 2015), Infinera would be offering: in respect of approximately 73.80 percent of the Transmode shares tendered by such shareholder: approximately 0.6376 Infinera Shares per Transmode share, equivalent to a value of approximately SEK 107.05 per Transmode share; and in respect of the remaining approximately 26.20 percent of the Transmode shares tendered by such shareholder: SEK 107.05 in cash per Transmode share. Accordingly, for every 10 Transmode shares tendered, each Transmode shareholder would receive SEK 280.50 in cash and approximately 4.705 Infinera Shares, which means that it would be the cash portion of the total Offer consideration that would be reduced.

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If the Offer is accepted in its entirety, 13,037,196 Infinera Shares will be issued under the Offer, corresponding to approximately 10.1 percent of Infinera’s shares outstanding. Following completion of the Offer, if accepted in its entirety, former Transmode shareholders would hold Infinera Shares representing approximately 9.2 percent of the outstanding shares of and voting power in the Combined Company and approximately 8.7 percent of the Combined Company on a fully diluted basis.¹⁰

Only whole Infinera Shares will be delivered to Transmode shareholders who accept the Offer. Fractions of shares will be combined and sold on the NASDAQ Global Select Market on behalf of the Transmode shareholders concerned, and the average net proceeds will thereafter be distributed among such shareholders in relation to the size of each shareholder’s fraction of an Infinera Share.

Infinera has not paid any cash dividends on its common stock and does not currently intend to pay any cash dividends on common stock in the near future.¹¹

No commission will be charged in respect of the settlement of the Transmode shares tendered to Infinera under the Offer.

For the Transmode shares that are tendered for the Share Consideration, no immediate Swedish tax consequences should arise for individual shareholders of Transmode under certain roll-over relief provisions. Provided that these provisions apply, the tax basis of the divested shares in Transmode will be carried over to the shares in Infinera (i.e., the shares in Infinera will for tax purposes be deemed to have been acquired for an amount equal to the tax basis in the divested shares in Transmode). For the Transmode shares that are tendered for the Cash Consideration, the sale of shares in Transmode will be a taxable event that may give rise to a capital gain or a loss. For individuals taxable in Sweden the tax rate for capital income is 30 percent.¹²

The Offer is not subject to any financing conditions. Infinera will finance the cash portion of the Offer consideration through its existing cash resources.

 

10	Based on 27,709,236 outstanding shares in Transmode (i.e., excluding 79,440 own shares held in treasury by Transmode) and 129,093,644 outstanding shares in Infinera as of 28 March 2015.

11

Should at some future date a dividend be paid on Infinera’s common stock, the Infinera Shares issued as consideration under the Offer would carry equal rights with respect to such dividend as the Infinera Shares already issued and entitled to dividends, provided that the record date for such dividend occurs after the settlement of the Offer.

12	Other rules apply to other categories of shareholders including corporate shareholders.

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At the time of this announcement Infinera does not hold any Transmode shares or any financial instruments that give financial exposure to Transmode shares, nor has Infinera acquired or agreed to acquire any Transmode shares or any financial instruments that give financial exposure to Transmode shares during the six months preceding the announcement of the Offer. For further information about the undertaking by Pod to accept the Offer, please see “Undertaking to accept the Offer and lock-up undertaking” below.

Infinera may acquire, or enter into arrangements to acquire, shares in Transmode outside the Offer. Any purchases made or arranged will be in accordance with Swedish law and Nasdaq Stockholm’s Takeover Rules (the “Takeover Rules”) and will be disclosed in accordance with applicable rules.

Offer value and premium

The total value of the Offer for all shares in Transmode¹³ amounts to approximately SEK 3,020 million.¹⁴

The Offer represents a premium of:

 

•

approximately 46 percent compared to the six month volume-weighted average share price of SEK 74.80 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer;

 

•

approximately 32 percent compared to the three month volume-weighted average share price of SEK 82.75 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer;

 

•

approximately 20 percent compared to the one month volume-weighted average share price of SEK 90.58 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer; and

 

•

approximately 13 percent compared to the closing share price of SEK 96.50 for the Transmode share on Nasdaq Stockholm on 8 April 2015, the last trading day prior to announcement of the Offer.

The Offer implies a ratio of approximately 2.9 times Enterprise Value to Fiscal Year 2014 sales (EV/Sales) of Transmode and a ratio of approximately 49 times the value of the Offer to Transmode’s Fiscal Year 2014 earnings (P/E).

 

 

13	The Offer value is based on 27,709,236 outstanding shares in Transmode (i.e., excluding 79,440 own shares held in treasury by Transmode).

14

Based on USD 19.43, which was the closing price for Infinera Shares on 8 April 2015 (the last trading day prior to announcement of the Offer), i.e., SEK 167.90 based on a SEK/USD exchange rate of 8.6414. The total offer value corresponds to approximately USD 350 million, based on a SEK/USD exchange rate of 8.6414.

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Recommendation from the Board of Directors in Transmode

The Board of Directors of Transmode unanimously recommends that Transmode shareholders accept the Offer.¹⁵ The Transmode Board of Directors has obtained a fairness opinion from Lenner & Partners regarding the Offer, according to which the Offer is fair from a financial point of view for the shareholders in Transmode.

Undertaking to accept the Offer and lock-up undertaking

Undertaking to accept the Offer

The largest shareholder in Transmode – Pod – holding in aggregate 9,223,140 Transmode shares, representing approximately 33 percent of the total number of shares and votes in Transmode, has undertaken to accept the Offer, subject to certain conditions. In the event that before the expiration of the acceptance period (including any extension) under the Offer a third party announces a public offer to acquire all the shares in Transmode for a price which exceeds the price in the Offer by more than eight (8) percent (the “8 Percent Hurdle”) and such offer is recommended by the Board of Directors of Transmode (a “Superior Offer”), and provided that Infinera has not publicly announced an increased Offer that is recommended by the Board of Directors of Transmode (“Increased Offer”) no later than on the date preceding the last day of the acceptance period (excluding any extension of it) under the Superior Offer (the “Right to Match”), then Pod’s undertaking to accept the Offer shall lapse and Pod shall be entitled to withdraw any acceptance of the Offer and accept the Superior Offer. In case an Increased Offer is made and the Superior Offer is thereafter increased to exceed the Increased Offer and such increased Superior Offer is recommended by the Board of Directors of Transmode (an “Increased Superior Offer”), and provided that Infinera does not exercise its Right to Match, then Pod’s undertaking to accept the Offer shall lapse and Pod shall be entitled to withdraw any acceptance of the Offer and accept the Increased Superior Offer. The 8 Percent Hurdle shall apply to a Superior Offer only (but not to any subsequent Increased Superior Offer), whereas the Right to Match shall apply to each and every Superior Offer and each and every Increased Superior Offer.

For the purposes of determining whether a Superior Offer exceeds the 8 Percent Hurdle, or, as the case may be, an Increased Superior Offer exceeds an Increased Offer, the following shall apply: (i) the part of the consideration that consists of listed securities under the Offer or, as the case may be, an Increased Offer shall be valued based on the Prevailing Conditions (as defined below) on the last completed trading day before announcement of the Offer or, as the case may be, the Increased Offer; (ii) if a Superior Offer or, as the case may be, an Increased Superior Offer includes a cash alternative coupled with a not all cash alternative, then the value of the cash alternative shall be elected for the determination of the offer value and any alternative forms of consideration shall be disregarded; and (iii) if the consideration under a Superior Offer

 

15

Since Pod has entered into an undertaking to tender its shares in Transmode in the Offer (please see “Undertaking to accept the Offer and lock-up undertaking” below), Board members Tom Nyman, Chairman of the Board of Transmode and Director of Pod, and Axel Roos, Director of the Board of Transmode and CEO and Director of Pod, have, due to a conflict of interest, not participated in Transmode’s Board of Directors’ handling of, or decisions relating to, the Offer.

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or, as the case may be, an Increased Superior Offer consists (wholly or partly) of listed securities, such offer shall be valued based on the Prevailing Conditions (as defined below) on the last completed trading day before announcement of the Superior Offer or, as the case may be, the Increase Superior Offer. The “Prevailing Conditions” shall mean (i) the quotation or price (as derived from the relevant exchange) of Infinera’s or the third party’s securities, as relevant, at the close of business on the above specified trading day and (ii) if the currency of the consideration under an offer is not in SEK, the currency conversion shall be calculated based on the applicable currency/SEK exchange rate on the day immediately preceding the date the offer was publicly announced, as derived from the European Central Bank daily foreign exchange reference rate at close of business.

Pod’s undertaking to accept the Offer shall terminate automatically and be of no further force or effect if the Offer lapses or is withdrawn, or the undertaking has lapsed due to a Superior Offer in accordance with the above, i.e., in cases where Infinera has not exercised its Right to Match. Furthermore, all of Pod’s obligations under the undertaking will lapse, at the option of Pod, if (a) the Offer is not being declared unconditional before 15 September 2015; (b) a circumstance has occurred, which could not have been reasonably known or anticipated by Pod at the time of entering into the undertaking, which would have a material adverse effect or could reasonably be expected to have a material adverse effect on Infinera’s liquidity, sales, results, solidity, assets or equity; or (c) any information made public by Infinera or disclosed by Infinera to Pod or Transmode is materially inaccurate, incomplete or misleading in respects that could reasonably be expected to have a materially adverse effect on Infinera’s liquidity, sales, results, solidity, assets or equity.

Lock-up undertaking

Pod has agreed not to dispose of the Infinera shares received as consideration for the Transmode shares tendered in the Offer during a certain period (the “Holding Period”). The Holding Period will commence upon settlement of the Offer and will continue until all of the Infinera shares received have been released from the holding restrictions pursuant to the following. One-fifth (1/5) of the shares shall be released from the holding restrictions on the forty-fifth day after settlement of the Offer. One-fifth (1/5) of the shares shall be released from the holding restrictions each month thereafter on the same day of the month as the day of the settlement of the Offer. Thomas J. Fallon, CEO of Infinera, and David F. Welch, Co-Founder of Infinera, have, subject to certain exemptions, entered into similar restrictions on their shares in Infinera.

Conditions to the Offer

Completion of the Offer is conditional on:

 

i)

the Offer being accepted to such an extent that Infinera becomes the owner of shares in Transmode representing more than 90 percent of the total number of shares of Transmode;

 

ii)

Infinera’s Registration Statement on Form S-4 in the United States, which will register the offer and issuance of the Infinera Shares, becoming effective under the Securities Act of 1933, as amended, and not being the subject of any stop order or proceeding seeking a stop order by the Securities and Exchange Commission (the “SEC”);

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iii)

the Infinera Shares to be issued under the Offer being approved for listing on the NASDAQ Global Select Market;

 

iv)

there being no circumstances, which Infinera did not have knowledge of at the time of the announcement of the Offer, having occurred which would have a material adverse effect or could reasonably be expected to have a material adverse effect on Transmode’s sales, results, liquidity, equity ratio, equity or assets;

 

v)

neither the Offer nor the acquisition of Transmode being rendered wholly or partially impossible or significantly impeded as a result of legislation or other regulation, any decision of court or public authority, or any similar circumstance, which is actual or can reasonably be anticipated, and which Infinera could not reasonably have foreseen at the time of the announcement of the Offer;

 

vi)

Transmode not taking any action that is likely to impair the prerequisites for making or completing the Offer;

 

vii)

no information made public by Transmode or disclosed by Transmode to Infinera being materially inaccurate, incomplete or misleading, and Transmode having made public all information which should have been made public by it; and

 

viii)

no other party announcing an offer to acquire shares in Transmode on terms more favorable to the shareholders of Transmode than the Offer.

Infinera reserves the right to withdraw the Offer in the event it becomes clear that any of the above conditions is not satisfied or cannot be satisfied. With regard to conditions ii) – viii), however, such withdrawal will only be made if the non-satisfaction is of material importance to Infinera’s acquisition of shares in Transmode.

Infinera reserves the right to waive, in whole or in part, one or more of the conditions above, including with respect to condition i) above, to complete the Offer at a lower level of acceptance.

Brief description of Infinera

Infinera Corporation (NASDAQ: INFN) is a U.S. corporation incorporated in the State of Delaware, USA. Infinera’s shares are traded on the NASDAQ Global Select Market. Infinera was incorporated in December 2000, and is headquartered in Sunnyvale, California, USA. Infinera’s principal executive offices are located at 140 Caspian Court, Sunnyvale, CA 94089, USA.

Infinera provides optical transport networking equipment, software and services to Tier 1 and Tier 2 telecommunications service providers, Internet content providers, cable operators, wholesale and enterprise carriers, research and education institutions, and government entities (collectively, “Service Providers”) across the globe. Infinera’s technologies and platforms enable Service Providers to automate, converge and scale their data center, metro, long-haul and subsea optical networks. As of 27 December 2014, Infinera had 1,495 employees. A total of 567 of those employees were located outside of the United States. Total revenue was USD 668.1 million in 2014 and USD 544.1 million in 2013. Infinera’s current market capitalization is approximately USD 2,508 million.¹⁶

 

16	Based on USD 19.43, which was the closing price for Infinera Shares on 8 April 2015 (the last trading day prior to announcement of the Offer), and a total number of 129,093,644 outstanding shares of Infinera as of 28 March 2015.

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More information regarding Infinera is available on Infinera’s website, www.infinera.com, and on the SEC’s website, www.sec.gov. Information contained on these websites are not incorporated herein by reference and should not be considered to be part of this press release.

Listing of Infinera

Infinera has initiated discussions with Nasdaq Stockholm and is evaluating whether to apply for a secondary listing on Nasdaq Stockholm, in addition to its current listing on the NASDAQ Global Select Market in the United States. Should Infinera move forward and apply for a secondary listing on Nasdaq Stockholm, it is anticipated that such listing would be approved in connection with the settlement of the Offer.

Due diligence

Infinera has conducted a limited confirmatory due diligence review of certain business, financial and legal information relating to Transmode in connection with the preparation of the Offer. In connection with such due diligence review, Infinera has received information regarding some of Transmode’s financial results for the first quarter of 2015, a summary of which will be published by Transmode today in a press release. Transmode has advised Infinera that, besides the above, Infinera has not received any information which has not been previously disclosed and which could reasonably be expected to affect the price of the shares in Transmode in connection with the due diligence review.

Transmode has performed a limited due diligence review of certain business, financial and legal information relating to Infinera.

Statement from the Swedish Securities Council in relation to the Offer

The Swedish Securities Council (Sw. Aktiemarknadsnämnden) has approved an extension of the period for preparing and filing the offer document with the Swedish Financial Supervisory Authority (the “SFSA”) (Sw. Finansinspektionen) from four weeks after the announcement of the Offer, to eight weeks after such date. The reasons for the extension are the time-consuming process of preparing pro forma financial statements, including converting Transmode’s financial statements from IFRS to U.S. GAAP, and that Infinera has certain filing requirements with the SEC (see ruling AMN 2015:06). Infinera may request an additional extension if necessary.

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Indicative timetable¹⁷

Estimated date for publication of the Offer document: 25 June 2015

Estimated acceptance period: 26 June 2015 – 17 July 2015

Estimated settlement date: 29 July 2015

Infinera reserves the right to extend the acceptance period as well as to postpone the date of settlement. Infinera will announce any extension of the acceptance period and/or postponement of the date of settlement by a press release in accordance with applicable laws and regulations.

The Offer does not require pre-clearance filing with competition authorities.

Brief description of Transmode

Transmode is a global provider of packet-optical networking solutions that enable fixed line and mobile network operators to cost effectively address the capacity needs created by the rapid growth in video and data traffic. These solutions are important building blocks in next-generation high-speed optical networks that support services such as broadband backhaul, mobile data backhaul, video delivery services and cloud computing. Transmode’s solutions are designed to increase the capacity, flexibility and functionality of metro and regional networks and are based on Wavelength Division Multiplexing (WDM) and transport technologies such as Ethernet. Transmode’s Native Packet Optical 2.0 architecture gives customers key advantages such as cost efficient Ethernet services, ultra-low latency, low power consumption and future proof network design.

Transmode is headquartered in Stockholm, Sweden and is listed on Nasdaq Stockholm, Mid Cap (TRMO). Since 2000 the company has installed more than 50,000 systems for over 650 fixed and mobile network operators, service providers, large enterprises and public institutions in over 50 countries across the globe.

More information regarding Transmode is available on Transmode’s website, www.transmode.com. Information contained on this website is not incorporated herein by reference and should not be considered to be part of this press release.

The Combined Company in summary

General

The Combined Company will have an end-to-end product portfolio that will enable it to broadly address the DWDM market, Metro, Long Haul and Subsea. As there is minimal customer overlap, the Combined Company can provide a full range of Metro products to existing Infinera Long Haul customers, while Transmode can offer Infinera’s Long Haul and Subsea products, powered by PICs, to its existing customers. The Combined Company would be better positioned to win business from larger Service Providers that value vendors with end-to-end capabilities.

Infinera recently started selling the Cloud Xpress to serve the Metro Data Interconnect market, and has disclosed plans to have a Metro Core Aggregation product ready by the end of 2015 that will serve a portion of the Metro market. The combination of the two companies is expected to accelerate Infinera’s ability to more fully address the fast growing 100G Metro market.

 

17	All dates are preliminary and may be subject to change.

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Product strategy

Infinera would seek to integrate Transmode’s portfolio of products and solutions under a common network management umbrella, which is anticipated to be Infinera’s current suite of market-leading network and service management tools. In addition, in order to maximize the ability to enable end-to-end networking and deliver the associated benefits, Infinera foresees working closely with Transmode to port value-added technologies across each company’s product lines. Such technologies may include, but are not limited to, PICs, analog DSPs, OTN switching/mapping ASICs, synchronization protocols and techniques, Ethernet and MPLS protocol stacks, optical system designs, service management tools, SDN controllers, and others.

Organization

A positive impact is expected from combining the talents of both companies’ engineering teams, which will have a larger combined R&D knowledge base to utilize. Each company’s engineering structure is anticipated to remain substantively intact and Infinera intends to have Transmode’s current CEO lead the Metro Aggregation business operations of the Combined Company. The optimal structures of each function will be determined during the period following the completion of the Offer and the creation of the Combined Company, after an assessment of the Combined Company’s optimal structure and staffing.

A successful integration process is crucial in order to realize expected synergies. The success of the integration is incumbent upon contributions and support of management teams of both companies. Infinera intends to retain key members of Transmode’s current senior management team to ensure successful integration and to benefit from their knowledge and experience over time. It is expected that the Combined Company will maintain Infinera’s and Transmode’s current facilities. The exact structure and assignments of the Combined Company’s senior management team will be determined over the course of the integration.

Dividend policy

Infinera does not currently pay a dividend. In order to focus on maximizing the Combined Company’s prospects, the Combined Company does not currently intend to pay a shareholder dividend in the near future.

Shareholder structure

The Combined Company’s top three shareholders (based on Infinera’s shareholder structure as of 28 March 2015 and assuming full acceptance of the Offer) will be:

 

1.

FMR LLC (13.2%)18

 

2.

The Vanguard Group (5.4%)19

 

3.

BlackRock Fund Advisors (5.0%)20

 

 

18	According to Schedule 13G/A filed with the SEC on 13 February 2015 by FMR LLC (“FMR”), FMR is deemed to be the beneficial owner of 18,792,952 shares of common stock of Infinera.

19	According to a Schedule 13G/A filed with the SEC on 10 February 2015 by The Vanguard Group (“Vanguard”), Vanguard is the beneficial owner of 7,728,166 shares of commons stock of Infinera.

20	According to a Schedule 13G/A filed with the SEC on 2 February 2015 by BlackRock, Inc. (“BlackRock”), BlackRock is the beneficial owner of 7,108,991 shares of common stock of Infinera.

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Infinera has no publicly available information about other significant shareholders. Pod, which holds approximately 33 percent of all issued shares in Transmode has expressed its full support for the combination by signing an undertaking to accept the Offer and entering into a lock-up undertaking. After full acceptance of the Offer, Pod will hold approximately 3.1 percent of the Combined Company.

If the Offer is accepted in its entirety, 13,037,196 Infinera Shares will be issued under the Offer, corresponding to approximately 10.1 percent of Infinera’s shares outstanding. Following completion of the Offer, if accepted in its entirety, former Transmode shareholders would hold Infinera Shares representing approximately 9.2 percent of the outstanding shares of and voting power in the Combined Company and approximately 8.7 percent of the Combined Company on a fully diluted basis.²¹

Combined Company financial information

The below unaudited financial information relates to information taken from each company’s reported financial results. Infinera reports in accordance with U.S. GAAP while Transmode reports in accordance with IFRS and differences in accounting policies may occur. The financial information is only an aggregation of financial information for the various businesses for the relevant time periods in order to provide an illustration of the Combined Company’s sales and earnings under the assumption that the activities were conducted within the same group from the beginning of each period presented.

The aggregation should not be viewed as pro forma since adjustments have not been made for the effects of future acquisitions analyses, differences in accounting policies and transaction costs. The information set forth below does not necessarily reflect the results or the financial position that Transmode and Infinera together would have had if they had conducted their operations as a group during the same periods. For instance, expected synergies have not been taken into account. Nor is this information indicative of what of the Combined Company’s future earnings will be. Infinera currently intends to commence reporting consolidated accounts for the Combined Company at the earliest from September 2015.

 

 

21	Based on 27,709,236 outstanding shares in Transmode (i.e., excluding 79,440 own shares held in treasury by Transmode) and 129,093,644 outstanding shares in Infinera as of 28 March 2015.

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(SEK million)
Full Year 2014		Infinera*				Transmode				Adjustments				The Combined Company
Revenue			5,732.1				930.0				—				6,662.1
Gross Profit			2,473.7				471.2				—				2,944.9
Operating Profit			234.6				70.6				—				305.2
Net Income			117.2				61.5				—				178.7
Earnings Per Share			0.91				2.22				—				1.26
Net Cash22			2,066.2				294.8				—				2,361.0
Equity			4,134.8				583.0				—				4,717.8

 

*	All USD amounts have been converted into SEK based on a USD/SEK exchange rate of 8.58.

Pro forma financial information for the Combined Company under U.S. GAAP will be included in the offer document relating to the Offer, as well as in Infinera’s Registration Statement on Form S-4 to be filed with the SEC, and may vary significantly from the combined financial information contained herein.

The Offer is not subject to any financing conditions. As of 27 December 2014, Infinera had cash, cash equivalents, investments and restricted cash of USD 391 million and carried USD 150 million in convertible debt. Infinera’s cash flow from operations in 2014 was USD 36 million. Infinera is capable of executing the Offer without additional financing. Moreover, the Combined Company is expected to generate positive cash flow from operations in fiscal 2015.

Compulsory acquisition and delisting

If Infinera becomes the owner of more than 90 percent of the shares of Transmode, Infinera intends to initiate a compulsory acquisition procedure with respect to the remaining shares in Transmode under the Swedish Companies Act (Sw. aktiebolagslagen (2005:551)). In connection therewith, Infinera will promote a delisting of the Transmode shares from Nasdaq Stockholm.

Applicable law and disputes

The Offer, as well as the agreements entered into between Infinera and the Transmode shareholders as a result of the Offer, shall be governed and construed in accordance with substantive Swedish law. Any dispute regarding the Offer, or which arises in

 

22	For Infinera, net cash includes cash, cash equivalents, investments and restricted cash of USD 391 million less outstanding debt of USD 150 million.

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connection therewith, shall be exclusively settled by Swedish courts, and the City Court of Stockholm (Sw. Stockholms tingsrätt) shall be the court of first instance.

The Takeover Rules and the Swedish Securities Council’s (Sw. Aktiemarknadsnämnden) rulings and statements on the interpretation and application of the Takeover Rules, including, where applicable, the Swedish Securities Council’s rulings and statements on the interpretation and application of the formerly applicable Rules on Public Offers for the Acquisition of Shares issued by the Swedish Industry and Commerce Stock Exchange Committee (Sw. Näringslivets Börskommitté), are applicable to the Offer. Furthermore, Infinera has, in accordance with the Swedish Takeover Act (Sw. lag (2006:451) om offentliga uppköpserbjudanden på aktiemarknaden), on 8 April 2015 contractually undertaken towards Nasdaq Stockholm to comply with said rules, rulings and statements and to submit to any sanctions that can be imposed on Infinera by Nasdaq Stockholm in the event of a breach of the Takeover Rules. On 9 April 2015, Infinera informed the SFSA of the Offer and the abovementioned undertakings towards Nasdaq Stockholm.

Advisers

Infinera has retained Morgan Stanley & Co. LLC, operating, as required, through its affiliate, Morgan Stanley & Co. International plc, as financial adviser; Mannheimer Swartling Advokatbyrå AB as Swedish legal adviser; and Wilson Sonsini Goodrich & Rosati, P.C. as U.S. legal adviser in connection with the Offer.

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Sunnyvale, California, USA

9 April 2015 (CET)

Infinera Corporation

The Board of Directors

Infinera discloses the information provided herein pursuant to the Takeover Rules. The information was submitted for publication on 9 April 2015, [03.00] a.m. CET.

 

 

Information about the Offer

Information about the Offer is made available at: www.infinera.se.

Infinera will host a conference call to discuss the Offer on 9 April 2015 at 5:30 a.m. Pacific Daylight Time (2:30 p.m. Central European Time). Interested parties may join the conference call by dialing 1-800-593-9940 (within the U.S.) or 1-630-395-0029 (outside of the U.S.). The participant passcode is PIC. The Audio Webcast will also be available at http://investors.infinera.com.

For further information, please contact:

 

Media (Europe): VERO Communications Tel. +46 8 611 38 30 johan@vero.se   Media (Rest of World): Anna Vue Tel. +1 (916) 595-8157 avue@infinera.com		Investors (Europe): Morgan Stanley & Co. International plc Tel. +46 8 6789600   Erik Tregaard Managing Director erik.tregaard@MorganStanley.com   Erik Ohman Managing Director erik.ohman@MorganStanley.com   Investors (Rest of World): Jeff Hustis Tel: +1 (408) 213-7150 jhustis@infinera.com

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Important information

The Offer, pursuant to the terms and conditions presented in this press release, is not being made to persons whose participation in the Offer requires that an additional offer document be prepared or registration effected or that any other measures be taken in addition to those required under Swedish and U.S. law and regulations.

This press release and any related Offer documentation are not being distributed and must not be mailed or otherwise distributed or sent in or into any country in which the distribution or offering would require any such additional measures to be taken or would be in conflict with any law or regulation in such country – any such action will not be permitted or sanctioned by Infinera. Any purported acceptance of the Offer resulting directly or indirectly from a violation of these restrictions may be disregarded.

The Offer is not being and will not be made, directly or indirectly, in or into, or by use of mail or any other means or instrumentality of interstate or foreign commerce of, or any facilities of a national securities exchange of, Australia, Hong Kong, Japan, Canada, New Zealand or South Africa. This includes, but is not limited to facsimile transmission, electronic mail, telex, telephone, the internet and other forms of electronic transmission. The Offer cannot be accepted and shares may not be tendered in the Offer by any such use, means, instrumentality or facility of, or from within Australia, Hong Kong, Japan, Canada, New Zealand or South Africa or by persons located or resident in Australia, Hong Kong, Japan, Canada, New Zealand or South Africa. Accordingly, this press release and any related Offer documentation are not being and should not be mailed or otherwise transmitted, distributed, forwarded or sent in or into Australia, Hong Kong, Japan, Canada, New Zealand or South Africa or to any Australian, Hong Kong, Japanese, Canadian, New Zealand or South African persons or any persons located or resident in Australia, Hong Kong, Japan, Canada, New Zealand or South Africa.

Any purported tender of shares in an Offer resulting directly or indirectly from a violation of these restrictions will be invalid and any purported tender of shares made by a person located in Australia, Hong Kong, Japan, Canada, New Zealand or South Africa or any agent fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions from within Australia, Hong Kong, Japan, Canada, New Zealand or South Africa will be invalid and will not be accepted. Each holder of shares participating in the Offer will represent that it is not an Australian, Hong Kong, Japanese, Canadian, New Zealand or South African person, is not located in Australia, Hong Kong, Japan, Canada, New Zealand or South Africa and is not participating in such Offer from Australia, Hong Kong, Japan, Canada, New Zealand or South Africa or that it is acting on a non-discretionary basis for a principal that is not an Australian, Hong Kong, Japanese, Canadian, New Zealand or South African person, that is located outside Australia, Hong Kong, Japan, Canada, New Zealand or South Africa and that is not giving an order to participate in such offer from Australia, Hong Kong, Japan, Canada, New Zealand or South Africa. Infinera will not deliver any consideration from the Offer into Australia, Hong Kong, Japan, Canada, New Zealand or South Africa.

This press release is not being, and must not be, sent to shareholders with registered addresses in Australia, Hong Kong, Japan, Canada, New Zealand or South Africa. Banks, brokers, dealers and other nominees holding shares for persons in Australia, Hong Kong, Japan, Canada, New Zealand or South Africa must not forward this press release or any other document received in connection with the Offer to such persons.

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The Offer will not be made to, nor will exchanges be accepted from, or on behalf of, holders of shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not comply with the laws of that jurisdiction. The acceptance period for the Offer for shares of Transmode described in this communication has not commenced.

In connection with the proposed combination of Infinera and Transmode, an offer document related to the Offer will be filed with and published by the SFSA. In addition, Infinera intends to file a Registration Statement on Form S-4 with the SEC. Shareholders of Transmode should read the above referenced documents and materials carefully when such documents and materials become available, as well as other documents filed with the SEC and with the SFSA, because they will contain important information about the transaction. Infinera may not exchange the common stock referenced in the preliminary prospectus until the Registration Statement on Form S-4 filed with the SEC becomes effective. Shareholders of Transmode may obtain free copies of these documents and materials, any amendments or supplements thereto and other documents containing important information about Infinera and the transaction, once such documents and materials are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents and materials filed with the SEC by Infinera will also be available free of charge from Infinera’s website (www.infinera.com) under the heading “SEC Filings” in the “Company—Investor Relations” portion of Infinera’s website.

Forward-looking information

Statements in this press release relating to future events, status and circumstances, including statements regarding future financial or operating performance, growth and other projections as well as benefits of the Offer, are forward-looking statements. These statements may generally, but not always, be identified by the use of words such as “anticipates,” “expects,” “believes,” continue,” “intends,” “target,” “projects,” “contemplates,” “plans,” “seeks,” “estimates,” “could,” “should,” “feels,” “will,” “would,” “may,” “can,” “potential” or similar expressions or variations, or the negative of these terms. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. There can be no assurance that actual results will not differ materially from those expressed or implied by these forward-looking statements due to a variety of factors, many of which are outside the control of Infinera. These risks and uncertainties include, but are not limited to, the risk that Transmode shareholders fail to tender more than 90 percent of Transmode’s outstanding shares, that any of the other closing conditions are not satisfied, and that the transaction may not close; the risk that Transmode’s and Infinera’s businesses will not be integrated successfully; the risk that synergies will not be realized or realized to the extent anticipated; the risk that the Combined Company will not realize on its financing or operating strategies; the risk that litigation in respect of either company or the transaction could arise; and the risk that disruption caused by the Combined Company would make it difficult to maintain certain strategic relationships. These risks and uncertainties also include those risks and uncertainties that will be discussed in the offer document to be filed with the SFSA at a future date by Infinera. Infinera cautions investors not to place considerable reliance on

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the forward-looking statements contained in this press release. Any forward-looking statements contained in this press release speak only as of the date on which they were made and Infinera has no obligation (and undertakes no such obligation) to update or revise any of them, whether as a result of new information, future events or otherwise, except for in accordance with applicable laws and regulations.

###

Exhibit 99.7

 

Press Release

Statement by the Board of Directors of Transmode in relation to Infinera’s public offer

Stockholm, Sweden – 9 April 2015 – The Board of Directors of Transmode has resolved to unanimously recommend the shareholders of Transmode to accept the public offer from Infinera

Background

This statement is made by the Board of Directors (the “Board”) of Transmode AB (publ) (“Transmode” or the “Company”) pursuant to section II.19 of the rules concerning takeover bids on the stock market adopted by Nasdaq Stockholm (the “Takeover Rules”). Since Pod Investment AB (“Pod”) has entered into an undertaking to tender its shares in Transmode in the Offer (as defined below), the Board members Tom Nyman, Chairman of the Board of Transmode and Director of Pod, and Axel Roos, Director of the Board of Transmode and CEO and Director of Pod, have, due to conflict of interest, not participated in the Board of Directors’ handling of, or decisions relating to, the Offer, including this statement. The remaining Board members in Transmode are independent of Infinera Corporation (“Infinera”).

Infinera, a company incorporated in the State of Delaware, United States, and whose shares are listed on the NASDAQ Global Select Market in the United States, has today, through a press release, announced a public offer to the shareholders of Transmode to transfer all of their shares in Transmode to Infinera for a consideration consisting of a mixture of cash and new shares of common stock in Infinera (the “Offer”). Infinera is offering each Transmode shareholder:

 

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in respect of approximately 72.48 percent of the Transmode shares tendered by such shareholder: approximately 0.6492 Infinera shares per Transmode share; and

 

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in respect of the remaining approximately 27.52 percent of the Transmode shares tendered by such shareholder: SEK 109.00 in cash per Transmode share1.

Based on Infinera’s closing share price of USD 19.43² as of 8 April 2015, the Offer values each Transmode share at SEK 109.00, and the total value of the Offer is approximately SEK 3,020 million³. The Offer represents a premium of:

 

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approximately 46 percent compared to the six month volume-weighted average share price of SEK 74.80 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer;

 

 

1

If Transmode pays dividends, including the dividend of SEK 1.95 per share as proposed by the Transmode Board of Directors on 5 February 2015, or makes any other distributions to shareholders, for which the record date occurs prior to the settlement of the Offer, the Offer consideration will be reduced accordingly. Assuming a dividend distribution of SEK 1.95 per share, Infinera would be offering: in respect of approximately 73.80 percent of the Transmode shares tendered by such shareholder: approximately 0.6376 Infinera shares per Transmode share, equivalent to a value of approximately SEK 107.05 per Transmode share; and in respect of the remaining approximately 26.20 percent of the Transmode shares tendered by such shareholder: SEK 107.05 in cash per Transmode share.

2	Corresponding to SEK 167.90, based on a SEK/USD mid exchange rate published by the Swedish Central Bank (Sw. Riksbanken) on 8 April 2015.

3	Based on 27,709,236 outstanding shares in Transmode (i.e. excluding 79,440 own shares held in treasury by Transmode).

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approximately 32 percent compared to the three month volume-weighted average share price of SEK 82.75 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer;

 

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approximately 20 percent compared to the one month volume-weighted average share price of SEK 90.58 for the Transmode share on Nasdaq Stockholm, up to and including 8 April 2015, the last trading day prior to announcement of the Offer; and

 

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approximately 13 percent compared to the closing share price of SEK 96.50 for the Transmode share on Nasdaq Stockholm on 8 April 2015, the last trading day prior to announcement of the Offer.

The acceptance period for the Offer is expected to run from and including 26 June 2015 to and including 17 July 2015. The Offer is conditional upon, inter alia, that it is accepted to the extent that Infinera becomes the owner of more than 90 percent of the total number of shares in Transmode, that Infinera’s Registration Statement on Form S-4 in the United States, which will register the offer and issuance of the new Infinera shares, becomes effective under the Securities Act of 1933, as amended, and not being the subject of any stop order or proceeding seeking a stop order by the Securities and Exchange Commission and that the new Infinera shares to be issued under the Offer are approved for listing on NASDAQ Global Select Market. The Offer is not conditional upon financing. For further details, please refer to Infinera’s Offer announcement.

In Infinera’s Offer announcement, it is stated that Infinera has initiated discussions with Nasdaq Stockholm and is evaluating whether to apply for a secondary listing on Nasdaq Stockholm, in addition to its current listing on the NASDAQ Global Select Market in the United States.

The Board has, at the written request of Infinera, permitted Infinera to carry out a limited confirmatory due diligence review of certain business, financial and legal information relating to Transmode in connection with the preparation of the Offer. In connection with such due diligence investigation, Infinera has received information regarding some of Transmode’s financial results for the first quarter of 2015, a summary of which will be published by Transmode today in a separate press release. Besides the above, Infinera has not received any information which has not been previously disclosed and which could reasonably be expected to affect the price of the shares in Transmode in connection with its due diligence investigation. Transmode has also, with the assistance of PwC and Hannes Snellman, performed a limited due diligence review of certain business, financial and legal information relating to Infinera.

Pod, the largest shareholder in Transmode who holds approximately 33 percent of the shares in Transmode, has entered into an undertaking with Infinera to accept the Offer, subject to certain conditions, as further described in Infinera’s Offer announcement. Pod has also agreed not to dispose of the Infinera shares received as consideration for the Transmode shares tendered in the Offer during a certain period (the “Holding Period”). The Holding Period will commence upon settlement of the Offer and will continue until all of the Infinera shares received have been released from the holding restrictions pursuant to the following. One-fifth (1/5) of the shares shall be released from the holding restrictions on the forty-fifth day after settlement of the Offer. One-fifth (1/5) of the shares shall be released from the holding restrictions each month thereafter on the same day of the month as the day of the settlement of the Offer.

The Board’s recommendation

The Board’s opinion of the Offer is based on a joint assessment of a number of factors that the Board has considered relevant in relation to the evaluation of the Offer. These factors include, but are not limited to, Transmode’s present position, the expected future development of the Company and thereto related possibilities and risks.

In the Board’s opinion, Transmode has a well defined and viable strategy going forward, however the Board views a combination of Transmode and Infinera as positive and believes it to be strategically merited, and the share consideration allows the Company’s shareholders to take part of the combined accelerated growth story and combination benefits.

The combination of Infinera and Transmode would create one of the leading global vendors of end-to-end optical transport solutions, spanning Longhaul and Metro applications. The combined worldwide sales operations will increase market coverage and open a larger part of the growing optical networking market fuelling new growth opportunities. Furthermore a broader and enhanced product portfolio can be developed combining expertise from the Company and Infinera in OTN, Ethernet and optical technologies. The combined Infinera and Transmode operations will together be well positioned to face challenges associated with growing in the networking equipment industry, including the requirement to invest in new markets and products.

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The Board believes there are a number of strategic benefits to Transmode from combining its operations with Infinera:

 

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Differentiated and comprehensive product portfolio with Transmode Metro aggregation and access products, combined with Infinera long-haul products

 

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World class R&D and engineering organization with complementary strengths to develop market leading solutions. The companies’ similar engineering culture will create a strong platform for successful integration

 

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Complementary geographical footprint with Transmode strengths in Europe and Infinera strengths in North America

 

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Cross-selling opportunities to complementary customer-bases

 

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Addressing a larger portion of the optical networking market and engineer better products with fast time-to-market

Since the initial public offering of Transmode, the Transmode shareholder base has been concentrated and the liquidity of Transmode’s share has been limited. During the last twelve months up to and including 8 April 2015, 25 percent of the outstanding shares of the Company have been traded. The Board views the relatively higher liquidity in the Infinera share as positive for the shareholders of Transmode.

The Board has had discussions with other industrial companies, but the combination with Infinera is in the view of the Board the best current option.

In its evaluation of the Offer, the Board also takes into account that Transmode’s largest shareholder, Pod, representing approximately 33 percent of the shares, has expressed its support for the Offer by signing an undertaking to accept the Offer and entering into a lock-up agreement. Furthermore, the Board notes that Thomas J. Fallon, CEO of Infinera, and David F. Welch, Co-Founder of Infinera, have, subject to certain exemptions, entered into similar lock-up restrictions on their shares in Infinera.

Furthermore, the Board has obtained a fairness opinion from Lenner & Partners regarding the Offer which was delivered to the Board on 9 April 2015. Lenner & Partners’ opinion, which is set forth in an appendix to this press release, is that the Offer is fair from a financial point of view for the shareholders in Transmode, Appendix 1.

Under the Takeover Rules, the Board shall also, based on what Infinera has expressed in its announcement of the Offer, present its views on the impact the completion of the Offer will have on Transmode, especially employment, and its views on Infinera’s strategic plans for Transmode and the impact these could be expected to have on employment and on Transmode’s business locations. The Board notes that Infinera in its offer announcement states that Infinera recognizes the skills and capabilities of Transmode’s management and employees and wishes to maintain an excellent relationship with them. It is further stated that for the near-term, Infinera does not intend to make any material changes to Transmode’s employees or to Transmode’s existing organization and operations, including the terms of employment and locations of the business. Each company’s engineering structure is anticipated to remain substantively intact and Infinera intends to have Transmode’s current CEO lead the Metro Aggregation business operations of the combined company. Infinera states that for the long-term, the optimal structures of each function will be determined during the period following the completion of the Offer and the creation of the combined company, after an assessment of the combined company’s optimal structure and staffing. The Board has no reason to question these statements regarding employment, Infinera’s strategic plans for Transmode and the impact these could be expected to have on employment and on Transmode’s business locations.

Based on the above, the Board of Directors unanimously recommends Transmode’s shareholders to accept Infinera’s Offer.

As part of the Board’s evaluation of the Offer, the Board has engaged Lazard as financial advisors and Hannes Snellman as legal advisors.

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This statement shall in all respects be governed by and construed in accordance with Swedish law. Disputes arising from this statement shall be settled exclusively by Swedish courts.

 

 

Stockholm, 9 April 2015

Transmode AB (publ)

The Board of Directors

This statement has also been drafted in a Swedish language version. In case of any discrepancies between the Swedish and the English text, the Swedish text shall prevail.

Transmode discloses the information provided herein pursuant to the Swedish Securities Market Act and the Takeover Rules. The information was submitted for publication on 9 April 2015 at 07:45 CET.

For more information please contact:

Helena Stångberg

Telephone: +46 709 71 12 53

Email: Helena.stangberg@halvarsson.se

About Transmode

Transmode is a global provider of packet-optical networking solutions that enable fixed line and mobile network operators to cost effectively address the capacity needs created by the rapid growth in video and data traffic. These solutions are important building blocks in next-generation high-speed optical networks that support services such as broadband backhaul, mobile data backhaul, video delivery services and cloud computing. Transmode’s solutions are designed to increase the capacity, flexibility and functionality of metro and regional networks and are based on Wavelength Division Multiplexing (WDM) and transport technologies such as Ethernet. Transmode’s Native Packet Optical 2.0 architecture gives customers key advantages such as cost efficient Ethernet services, ultra-low latency, low power consumption and future proof network design.

Transmode is headquartered in Stockholm, Sweden and is listed on the NASDAQ OMX Stockholm Exchange (TRMO). Since 2000 the company has installed more than 50,000 systems for over 650 fixed and mobile network operators, service providers, large enterprises and public institutions in over 50 countries across the globe.

For additional information about Transmode, please visit www.transmode.com.

Important Information

The Offer will not be made to, nor will exchanges be accepted from, or on behalf of, holders of shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not comply with the laws of that jurisdiction. The acceptance period for the Offer for shares of Transmode described in this communication has not commenced.

In connection with the proposed combination of Infinera and Transmode, an offer document related to the Offer will be filed with and published by the Swedish Financial Supervisory Authority (the “SFSA”). In addition, Infinera intends to file a Registration Statement on Form S-4 with the SEC. Shareholders of Transmode should read the above referenced documents and materials carefully when such documents and materials become available, as well as other documents filed with the SEC and with the SFSA, because they will contain important information about the transaction. Infinera may not exchange the common stock referenced in the preliminary prospectus until the Registration Statement on Form S-4 filed with the SEC becomes effective. Shareholders of Transmode may obtain free copies of these documents and materials, any amendments or supplements thereto and other documents containing important information about Infinera and the transaction, once such documents and materials are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents and materials filed with the SEC by Infinera will also be available free of charge from Infinera’s website (www.infinera.com) under the heading “SEC Filings” in the “Company—Investor Relations” portion of Infinera’s website.

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LENNER & PARTNERS

Stockholm 9 April 2015

To the Board of Transmode AB (publ)

Infinera Corporation (“Infinera”) has on 9 April 2015 announced a public offer to the shareholders of Transmode AB (“Transmode”) to tender all their shares in Transmode to Infinera.

The offer consideration values each Transmode share at SEK 109.00¹ and the total offer value represents approximately SEK 3,020 million². The total offer consideration is a mixture of new shares of common stock in Infinera and cash (the “Offer”). Infinera is offering each Transmode shareholder in respect of approximately 72.48 percent of the Transmode shares tendered approximately 0.6492 Infinera shares per Transmode share and in respect of the remaining approximately 27.52 percent of the Transmode shares tendered in cash. Accordingly, for every 10 Transmode shares tendered, each Transmode shareholder will receive SEK 300 in cash and approximately 4.705 Infinera Shares. If Transmode pays dividends or other value transfers to shareholders prior to closing, the cash portion of the Offer will be reduced accordingly. The Offer is among other things conditional on the Offer being accepted to such extent that Infinera becomes the owner of shares in Transmode representing more than 90 percent of the total number of shares in Transmode and that all regulatory approvals are obtained.

Transmode’s largest shareholder, Pod Investment AB has on certain terms, agreed to tender all of its shares in the Offer.

The Board of Transmode has engaged Lenner & Partners Corporate Finance AB (“Lenner & Partners”) to provide an opinion, a so called fairness opinion, regarding the Offer from a financial point of view for the shareholders in Transmode.

In the analysis of the Offer, Lenner & Partners has among other things reviewed:

 

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the terms of the Offer and a draft of the press release regarding the announcement of the Offer;

 

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publicly available information, such as annual reports, interim reports and broker reports regarding both Transmode and Infinera;

 

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trading statistics, other financial and stock market related information concerning Transmode and Infinera and similar information for certain other comparable companies;

 

1	Based on USD 19.43, which was the closing price for Infinera Shares on 8 April 2015 (the last trading day prior to announcement of the Offer), and USD/SEK exchange rate of 8.6414, based on USD/SEK mid exchange rate published by the Swedish Central Bank (Sw. Riksbanken) on 8 April 2015.

2	Based on 27,709,236 outstanding shares in Transmode (i.e. excluding 79,440 own shares held in treasury by Transmode). The total Offer value corresponds to approximately USD 350 million, based on a USD/SEK exchange rate of 8.6414.

Lenner & Partners

Jakobsbergsgatan 7, S-111 44 Stockholm

+46 (0)8 54 50 61 00 +46 (0)8 54 50 61 02 (fax)

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selected mergers and acquisitions that have been viewed to be comparable to the Offer;

 

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internal forecasts and forward looking information regarding Transmode;

 

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discussions with members of the management and the Board of Transmode and representatives for Transmode’s other advisors; and

 

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internal reports and materials compiled by Transmode’s other advisors.

Lenner & Partners’ fairness opinion is based on several generally accepted valuation methods that are typically used in this type of analysis. The analyses have been produced solely to enable Lenner & Partners to provide the Board of Transmode with a fairness opinion whether or not the Offer is fair from a financial point of view.

Lenner & Partners’ assignment does not include commenting on any other potential transactions that could be more favourable for the shareholders of Transmode.

Lenner & Partners has not conducted a due diligence in order to control or verify the received information. Lenner & Partners has relied on the information received from Transmode and its advisors. The information is assumed to be true and fair and complete.

Lenner & Partners’ fairness opinion is based on current conditions and the information that has been received to date. A portion of the Offer consideration consists of newly issued Infinera shares to Transmode shareholders in exchange for their existing. Lenner & Partners’ fairness opinion does not include any assessment of what prices the Infinera share will trade at in the future or any future changes in currency rates. Lenner & Partners is not responsible for any events after the current date that could affect this fairness opinion and the assumptions on which the fairness opinion is based.

Lenner & Partners’ fairness opinion has been provided as information and documentation to the Board of Transmode. This fairness opinion is not a recommendation whether or not shareholders in Transmode should tender their shares in the Offer.

Lenner & Partners will be paid a fixed fee for this fairness opinion and the fee is not dependent on the outcome of the Offer.

Lenner & Partners has noticed the strong development of the share price of Infinera during the last six month-period. Brokers’ forecasts and assessments, that Lenner & Partners has reviewed, however support the current share price. Infinera’s large market capitalisation relative Transmode and good liquidity have also been noted, as well as the fact that an investment in the Infinera share means exposure to changes in the exchange rate between US dollar and Swedish krona.

Based on above and other circumstances, that Lenner & Partners considers being relevant, Lenner & Partners’ current opinion regarding the Offer is that it is fair from a financial point of view for the shareholders in Transmode.

 

2

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Swedish law is applicable on this Fairness Opinion.

Lenner & Partners Corporate Finance AB

 

/s/ Lars Lenner				/s/ Patrik Tillman
Lars Lenner				Patrik Tillman

 

3

Exhibit 99.8

 

Press Release

Transmode announces preliminary results for the first quarter 2015

Stockholm, Sweden – 9 April 2015 – Transmode, a global supplier of packet optical networking solutions, is today announcing preliminary results for the first quarter 2015.

Following Infinera Corporation’s recommended public offer to the shareholders of Transmode announced earlier this morning, Transmode is announcing its preliminary first quarter results due to such information being provided to Infinera in connection with the preparations of the public offer.

Transmode’s preliminary revenues for the first quarter 2015 will be in the range of SEK 285-290 m (SEK 231.3 m). This represents a growth of 23-25% compared to the corresponding quarter the previous year.

Preliminary operating profit for the first quarter 2015 is expected to be in the range of SEK 46-51 m (SEK 21.5 m), which means an improved operating margin compared to the corresponding quarter the previous year.

Transmode’s final first quarter 2015 results will be published on 29 April at 08:00 a.m. CET, as previously stated.

Transmode discloses the information provided herein pursuant to the Swedish Securities Market Act and the Takeover Rules. The information was submitted for publication at [xx:xx] a.m. CET on 9 April 2015.

This press release has also been drafted in a Swedish language version. In case of any discrepancies between the Swedish and the English language versions, the Swedish version shall prevail.

For more information please contact:

Johan Wilsby

Chief Financial Officer

Transmode AB

Telephone: +46 76 859 6882

Email: johan.wilsby@transmode.com

About Transmode

Transmode is a global provider of packet optical networking solutions that enable fixed line and mobile network operators to cost effectively address the capacity needs created by the rapid growth in video and data traffic. These solutions are important building blocks in next-generation high-speed optical networks that support services such as broadband backhaul, mobile data backhaul, video delivery services and cloud computing. Transmode’s solutions are designed to increase the capacity, flexibility and functionality of metro and regional networks and are based on Wavelength Division Multiplexing (WDM) and transport technologies such as Ethernet. Transmode’s Native Packet Optical 2.0 architecture gives customers key advantages such as cost efficient Ethernet services, ultra-low latency, low power consumption and future proof network design.

Transmode is headquartered in Stockholm, Sweden and is listed on the NASDAQ OMX Stockholm Exchange (TRMO). Since 2000, the company has installed more than 50,000 systems for over 650 fixed and mobile network operators, service providers, large enterprises and public institutions in over 50 countries across the globe.

For additional information about Transmode, please visit www.transmode.com.

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Important Information

This announcement makes reference to Infinera Corporation’s recommended public offer to the shareholders of Transmode (the “Offer”). The Offer will not be made to, nor will exchanges be accepted from, or on behalf of, holders of shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not comply with the laws of that jurisdiction. The acceptance period for the Offer for shares of Transmode described in this communication has not commenced.

In connection with the proposed combination of Infinera and Transmode, an offer document related to the Offer will be filed with and published by the Swedish Financial Supervisory Authority (the “SFSA”). In addition, Infinera intends to file a Registration Statement on Form S-4 with the SEC. Shareholders of Transmode should read the above referenced documents and materials carefully when such documents and materials become available, as well as other documents filed with the SEC and with the SFSA, because they will contain important information about the transaction. Infinera may not exchange the common stock referenced in the preliminary prospectus until the Registration Statement on Form S-4 filed with the SEC becomes effective. Shareholders of Transmode may obtain free copies of these documents and materials, any amendments or supplements thereto and other documents containing important information about Infinera and the transaction, once such documents and materials are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents and materials filed with the SEC by Infinera will also be available free of charge from Infinera’s website (www.infinera.com) under the heading “SEC Filings” in the “Company—Investor Relations” portion of Infinera’s website.