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)
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Delaware |
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001-33486 |
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77-0560433 |
(State or other jurisdiction of
incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
140 Caspian Court
Sunnyvale, CA 94089
(Address of principal executive offices, including zip code)
(408) 572-5200
(Registrants 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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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 Companys 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 Transmodes 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 Infineras 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 Transmodes shareholders accept the Offer.
If the Offer is accepted in its entirety, 13,037,196 shares
of Infineras common stock (Infinera Shares) will be issued under the Offer, corresponding to approximately 10.1 percent of Infineras 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,
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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; |
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Infineras 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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the Infinera Shares to be issued under the Offer being approved for listing on the NASDAQ Global Select Market; |
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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 Transmodes sales, results, liquidity, equity ratio, equity or assets; |
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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; |
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Transmode not taking any action that is likely to impair the prerequisites for making or completing the Offer; |
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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 |
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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 Infineras 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 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 Pods 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 Pods 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 Infineras or the third partys 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.
Pods 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 Pods 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 Infineras 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 Infineras liquidity, sales, results, solidity, assets or
equity.
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 Transmodes employees in connection with Transmodes all-hands employee meeting held on April 9 at 1:00 p.m. CET. Copies of Infineras and
Transmodes presentations are attached hereto as Exhibits 99.4 and 99.5, respectively. Copies of the Companys press release announcing the Offer, which provides additional details on the terms of the Offer, and Transmodes press
releases announcing the recommendation of Transmodes 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 Infineras website at http://www.infinera.com/ under the heading SEC Filings
in the CompanyInvestor Relations portion of Infineras 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,
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 Transmodes outstanding shares, that any of the other
closing conditions are not satisfied, and that the transaction may not close; the risk that Transmodes and Infineras 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 Infineras 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 |
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99.1 |
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Irrevocable Undertaking. |
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99.2 |
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Holding Agreement. |
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99.3 |
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Investor Presentation. |
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99.4 |
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Infinera Presentation to Transmode. |
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99.5 |
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Transmode Employee Presentation. |
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99.6 |
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Press Release of Infinera Corporation dated April 8, 2015. |
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99.7 |
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Press Release of Transmode AB dated April 9, 2015. |
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99.8 |
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Press Release of Transmode AB dated April 9, 2015. |
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.
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INFINERA CORPORATION |
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Date: April 9, 2015 |
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By: |
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/s/ JAMES L. LAUFMAN |
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James L. Laufman Senior Vice President and
General Counsel |
EXHIBIT INDEX
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Exhibit Number |
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Description |
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99.1 |
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Irrevocable Undertaking. |
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99.2 |
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Holding Agreement. |
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99.3 |
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Investor Presentation. |
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99.4 |
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Infinera Presentation to Transmode. |
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99.5 |
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Transmode Employee Presentation. |
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99.6 |
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Press Release of Infinera Corporation dated April 8, 2015. |
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99.7 |
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Press Release of Transmode AB dated April 9, 2015. |
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99.8 |
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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:
SHAREHOLDERS 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 Shareholders 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.
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The Prevailing Conditions shall mean (i) the quotation or price (as derived from the relevant
exchange) of the Offerors or the third partys 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: |
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the Offer is made through a public announcement of the Offer on or before 15 April 2015; and |
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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: |
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the Offer lapses or is withdrawn, or |
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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 Shareholders obligations hereunder will lapse, at the option of the Shareholder, if |
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(a) |
the Offer is not being declared unconditional before 15 September 2015; |
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(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 Offerors liquidity, sales, results, solidity, assets or equity; or |
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(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 Offerors 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.
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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.
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Place: |
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Stockholm |
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Place: |
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Date: |
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8 April, 2015 |
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Date: |
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8 April, 2015 |
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POD INVESTMENT AB |
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INFINERA CORPORATION |
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/s/ Axel Roos |
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/s/ Brad Feller |
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By: |
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Axel Roos |
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By: |
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Brad Feller |
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/s/ Tom Nyman |
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By: |
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Tom Nyman |
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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 Shareholders 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 Offerors 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 Shareholders 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 Shareholders 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). |
Shareholder also agrees and consents to the entry of stop-transfer instructions with the
Offerors 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]
IN WITNESS WHEREOF, the undersigned has executed, or has caused to be executed, this Agreement on
the date first written above.
|
Very truly yours, |
|
Pod Investment AB |
Print Name of Shareholder |
|
/s/ Axel
Roos /s/ Tom Nyman |
Authorized Signature/s |
|
Axel
Roos Tom Nyman |
Names of Authorized Signatory/ies |
|
Executive
Officer Executive Officer |
Title/s |
|
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]
|
1 |
© 2015 Infinera
Infinera To Acquire Transmode
Establishes an End-to-End Portfolio
Investor Briefing
April 2015
Exhibit 99.3 |
|
2 |
© 2015 Infinera
This presentation contains "forward-looking" statements that involve risks,
uncertainties and assumptions. If the risks or uncertainties ever materialize or the
assumptions prove incorrect, our results may differ materially from those expressed or
implied by such forward-looking statements. All statements other than statements of
historical fact could be deemed forward- looking, including, but not limited to, any
projections of financial information; any statements about historical results that may
suggest trends for our business; any statements of the plans, strategies, and objectives of
management for future operations; any statements of expectation or belief regarding
future events, potential markets or market size, technology developments, or
enforceability of our intellectual property rights; and any statements of assumptions
underlying any of the items mentioned. These statements are based on estimates and
information available to us at the time of this presentation and are not guarantees of
future performance. These risks and uncertainties include, but are not limited to, the risk that Transmode shareholders fail to
tender more than 90% of Transmodes outstanding shares, that any other closing conditions
are not satisfied, and that the transaction may not close; the risk that
Transmodes and Infineras 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 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 SEC, 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, filed with the SEC, and those risks and uncertainties identified in any
subsequent reports filed with the SEC by Infinera. Our SEC filings are available on our
website at www.infinera.com and the SECs website at www.sec.gov. We assume no obligation to, and do not
currently intend to, update any such forward-looking statements. Safe Harbor
|
|
3 |
© 2015 Infinera
Market Inflections
Transport Becoming Strategic
Networks
Simplifying
to
New
Model of Cloud Services and
Intelligent Transport
Vision: Enable An Infinite Pool of Intelligent Bandwidth
Poised to take off
Scalable
Optics
and
Integrated
Packet-Optical
Key
for
Simplification |
|
4 |
© 2015 Infinera
Multi
Market
Strategy
Horizontal
Expansion
$15.3B (2019)
Transport Market
Source: Infonetics Q4 2014 Market Forecast
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
3. Penetrate
LH Core
1. Grow
Cloud
2. Seize |
|
5 |
© 2015 Infinera
Building the End-to-End Portfolio
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
Cloud
LH Core
Cloud Xpress
Sliceable Photonics
DTN-X
XTC4/10
XTC4
Opportunity to Accelerate into Metro Aggregation |
|
6 |
© 2015 Infinera
Introducing
Transmode:
A
Leader
in
Metro
Packet-Optical
Stockholm, Sweden
NASDAQ Stockholm (TRMO)
281 employees worldwide 2014
Packet-Optical metro network solutions
650 customers, 50000+ systems deployed
History of profitability
2014: $120M Net Sales, 50.7% Gross Margin, 7.6% Operating Margin
2009-2014: 50.3% Avg. Gross Margin, 13.4% Avg. Operating Margin
#1 Packet-Optical in EMEA
Applications: Business Ethernet, Mobile fronthaul/
backhaul, Broadband Aggregation
Source: Infonetics 2014
Financials as per IFRS; 1 USD = 7.78 SEK (Dec 2014) |
|
7 |
© 2015 Infinera
Outstanding Strategic Fit
Source: Q4 2014 INFN: Non-GAAP, TRMO: IFRS; Infonetics 2014,
DellOro 2014 #1 Packet
Optical
EMEA
#1 100G
WDM
ex-China
Strong
NA Base
Strong
EMEA
Base
PICs
SDN
Power
Efficient
Systems
Long
Haul
Wireless
Back &
Fronthaul
Subsea
46%
Gross
Margin
52%
Gross
Margin
Metro
Core
Metro
Cloud
Metro
Access,
Edge, Core |
|
8 |
© 2015 Infinera
Transmodes Leadership in Metro
Lowest
Power
& Space
50000+
Systems
650+
Customers
#1
Packet
Optical
EMEA
Source: Infonetics 2014
TM-Series
10G/100G
Packet-Optical
Ethernet,
Wireless
back-
haul
/
fronthaul
TG-Series
Biz.
Service
Wireless
backhaul
CPE / PON
Biz.
Service
Wireless
backhaul
WDM
access |
|
9 |
© 2015 Infinera
SDN Control
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
Cloud
LH Core
DTN-X
XTC4/10
Cloud Xpress
XTC4
Sliceable Photonics
Complementary Product Set |
|
10 |
© 2015 Infinera
Common
#1 100G WDM WW ex-China
Leader in ICP, NA Cable, Wholesale & Ent.
First mover in Metro Cloud for ICPs
#1 Packet-Optical EMEA
Strength in cable, wireless back/front
haul, Ethernet services
Leverage Strengths, Cross-Sell
Source: Infonetics 2014, DellOro 2014
Revenue Growth
Opportunity
Complementary Customer Base |
|
11 |
© 2015 Infinera
Product
Mix
Geographic
Mix
Complementary Market Offerings
2014
Metro 2%
Long-Haul
98%
Metro 100%
Americas
76%
APAC 4%
EMEA
20%
Americas
14%
APAC 4%
EMEA
82%
Combined
Entity
Metro
~18%
Americas
68%
EMEA
28%
APAC 4% |
|
12 |
© 2015 Infinera
Transmodes Strong Financials
5-Year Track Record (09-14)
To grow faster
than the market
Yearly sales growth higher than the
yearly growth of the global market for
Metro WDM equipment
To grow profitably
Operating margin of 12% (excluding
extraordinary items) or more over a
business cycle
Management Financial Targets
Source: Transmode FY09
FY14 IFRS Financial Statements
Revenue
CAGR
Average
Operating Margin
Average
Gross Margin
10.3%
13.4%
50.3% |
|
13 |
© 2015 Infinera
Expected Accretive in 2016
Synergistic Financials
Complementary customer base
Complementary product & market
End-to-End portfolio
Shared culture of deal discipline
Volume synergies
Leverage technologies across portfolio
More leveraged investments
2015E is Financial Analyst Consensus
TRMO: IFRS statements
1 USD = 7.78 SEK (Dec 2014), 8.5 SEK (Mar 2015)
TAM expansion
Revenue growth
High Gross Margins
Increased R&D Pool |
|
14 |
© 2015 Infinera
Benchmarking Financial Performance
Source: Public financial statements, Weighted average
for INFN+TRMO, ALU = Entire business
YoY Revenue Growth, %
2014
20
10
0
-10
50
40
30
Gross Margin, %
2014
INFN +
TRMO
Ciena
ALU
Cyan
MRV
Adva |
|
15 |
© 2015 Infinera
Compatible Philosophies
Play to Win
Customer First
Top-rated for Services and Support
Product Excellence
#1 100G WDM Worldwide, ex-China
#1 Packet-Optical EMEA
Profitability
Market leading Operating & Gross Margins
Culture + Talent + Business + Technology
Source: Infonetics 2014, DellOro 2014 |
|
16 |
© 2015 Infinera
A Transaction Good for All Stakeholders
Investors
Allows combined company to address $15.3B DWDM TAM (2019)
Combines two of the most profitable companies in the industry
Expected accretive to non-GAAP EPS in 2016; neutral to slightly dilutive 2H15
Customers
Combined company would be able to deliver an End-to-End product portfolio
Shared culture of customer first, strong technology and product excellence
Scale of combined company would allow for further investment in
technologies to allow continued differentiation
Employees
Ability to market and sell an End-to-End portfolio of products to address
customers
needs
Ability to develop compelling solutions with strong combined knowledge base
Source: Infonetics 2014 |
|
17 |
© 2015 Infinera
Infinera + Transmode
Full
Metro
portfolio
accelerates
100G
metro
share
End-to-End
portfolio,
$15B
market*
Complementary
customers
and
geographies
Expected
non-GAAP
EPS
accretive
in
2016
Common
philosophy
of
profitable
growth
has
led
to
strong
financial
results
Shared
culture
and
talent
driving
product
excellence
Technology
leadership
for
Packet-Optical
&
Metro
vision
acceleration
*Source: Infonetics Q4 2014 Market Forecast for 2019
|
|
18 |
© 2015 Infinera
Key Transaction Details
Anticipated Close
Third quarter of 2015
Closing Conditions
Tender of more than 90% of the shares of Transmode
Customary closing conditions and approvals
Transaction
Consideration
Approximately 109 SEK per share in stock and cash
o
For every 10 shares of Transmode, shareholders will receive SEK 300 in cash and
4.705 Infinera shares
o
Total of approximately 13.0 million new Infinera shares issued and $96 million in
cash
o
Transmode shareholders to own ~8.7% of combined company
Approximately $350 million total equity value
Financial Impact
Companies have highest gross margins in the industry
Cash consideration funded by Infinera balance sheet
Expected to be accretive to non-GAAP EPS in 2016; neutral to slightly dilutive
2H15 Other Terms
POD Investment AB, Transmodes largest shareholder has signed irrevocable
undertaking to support transaction and lockup agreement |
|
19 |
© 2015 Infinera
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 exchange 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. The acceptance period for the
exchange 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 Infineras website at
www.infinera.com
under the heading SEC Filings
in the CompanyInvestor Relations
portion of Infineras website. More
information about the exchange 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.
Disclaimer |
|
20 |
© 2015 Infinera
Thank You
www.infinera.com |
|
1 |
© 2015 Infinera
Infinera + Transmode
Tom Fallon, CEO
April 9, 2015
Exhibit 99.4 |
|
2 |
© 2015 Infinera
This presentation contains "forward-looking" statements that involve risks,
uncertainties and assumptions. If the risks or uncertainties ever materialize or the
assumptions prove incorrect, our results may differ materially from those expressed or
implied by such forward-looking statements. All statements other than statements of
historical fact could be deemed forward- looking, including, but not limited to, any
projections of financial information; any statements about historical results that may
suggest trends for our business; any statements of the plans, strategies, and objectives of
management for future operations; any statements of expectation or belief regarding
future events, potential markets or market size, technology developments, or
enforceability of our intellectual property rights; and any statements of assumptions
underlying any of the items mentioned. These statements are based on estimates and
information available to us at the time of this presentation and are not guarantees of
future performance. These risks and uncertainties include, but are not limited to, the risk that Transmode shareholders fail to
tender more than 90% of Transmodes outstanding shares, that any other closing conditions
are not satisfied, and that the transaction may not close; the risk that
Transmodes and Infineras 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 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 SEC, 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, filed with the SEC, and those risks and uncertainties identified in any
subsequent reports filed with the SEC by Infinera. Our SEC filings are available on our
website at www.infinera.com and the SECs website at www.sec.gov. We assume no obligation to, and do not
currently intend to, update any such forward-looking statements. Safe Harbor
|
|
3 |
© 2015 Infinera
Who is Infinera?
Innovator & Leader
Founded 2001 in Silicon Valley, IPO 2007
Photonic Integrated Circuits (PICs)
DWDM platforms with integrated switching
400+ Patents Filed/Granted
#1 Optical company WW rated by Infonetics
Global
~1,400 employees
Headquarters Sunnyvale, CA, USA
Global presence |
|
Leader
in
Intelligent
Transport
Network
solutions
23% YoY revenue growth in 2014
140 customers in 73 countries; 59 DTN-X customers
Diversified customer base across multiple verticals
-
17 Tier 1s globally
-
3 of top 4 Internet Content Providers
-
4 of top 5 NA Cable/MSOs
-
Multiple top bandwidth wholesalers
Infinera Performance
4 | ©
2015 Infinera |
|
5 |
© 2015 Infinera
Infinera
Financial
Stability
And
Continuing
to
Grow
Source: Infinera Financial Reporting
*Wall Street consensus
**DellOro
Group 3Q 2014 Optical Transport Report 2 Years 20+% Growth
Strong Balance Sheet
2014 Performance
$668 million revenue
44% Gross Margin
$50 million net income
(Non-GAAP)
2014 vs 2013
23% YoY Growth
vs. Market**
@11%
Revenue |
|
6 |
© 2015 Infinera
Building the End-to-End Portfolio
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
Cloud
LH Core
Cloud Xpress
DTN-X
XTC4/10
XTC4
Opportunity to Accelerate into Metro Aggregation
Sliceable Photonics |
|
7 |
© 2015 Infinera
Infinera + Transmode
Full
Metro
portfolio
accelerates
100G
metro
share
End-to-End
portfolio,
$15B
market*
Complementary
customers
and
geographies
Expected
non-GAAP
EPS
accretive
in
2016
Common
philosophy
of
profitable
growth
has
led
to
strong
financial
results
Shared
culture
and
talent
driving
product
excellence
Technology
leadership
for
Packet-Optical
&
Metro
vision
acceleration
*Source: Infonetics Q4 2014 Market Forecast for 2019
|
|
8 |
© 2015 Infinera
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
Cloud
LH Core
DTN-X
XTC4/10
Cloud Xpress
XTC4
SDN Control
Sliceable Photonics
Complementary Product Set |
|
9 |
© 2015 Infinera
Common
#1 100G WDM WW ex-China
Leader in ICP, NA Cable, Wholesale & Ent.
First mover in Metro Cloud for ICPs
#1 Packet-Optical EMEA
Strength in cable, wireless back/front
haul, Ethernet services
Leverage Strengths, Cross-Sell
Source: Infonetics 2014, DellOro 2014
Revenue Growth
Opportunity
Complementary Customer Base |
|
10 |
© 2015 Infinera
In the near term, there are no changes. Business as usual.
For both companies, this is an expansion into new addressable
markets with very minimal overlap
By leveraging our combined industry impact we are anticipating
expansion, not reduction. We expect this growth to be reflected
in our staffing plans.
We are looking to both companies
employees to identify
advantages and ensure success for the team and our customers
You will be updated as things progress
What does this mean for me? |
|
11 |
© 2015 Infinera
The Integration Plan and You
Owner
Early Q2
Q2 and Q3
Late Q3
Q4 and beyond
EXEC
TEAM
YOU
Read the
FAQ
Attend All
Hands
Ask
questions
Business as usual
(Your manager will reach out to you
specifically if necessary)
Identify and
respond to all
opportunities in
your area of
expertise to ensure
success of the
combined
organization
Create
Integration
Planning
Team
Integration Planning
Underway
Approximately 12
months to
achieve full
integration
Expected
Close |
|
12 |
© 2015 Infinera
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 exchange 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. The acceptance period for the
exchange 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 Infineras website at
www.infinera.com
under the heading SEC Filings
in the CompanyInvestor Relations
portion of Infineras website. More
information about the exchange 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.
Disclaimer |
|
13 |
© 2015 Infinera
Thank You
www.infinera.com |
|
All
Staff Information Meeting 9 April 2015
Exhibit 99.5 |
|
Public offer from Infinera
Transmode shareholders has received a public offer
from Infinera to acquire 100% of outstanding shares in
Transmode
Our Board has recommended our shareholders to
accept the offer
Our largest shareholder, POD Investment, has already
accepted the offer under certain conditions
The Offer consideration consists of a mix of cash and
new Infinera shares
2
Confidential |
|
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.
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
position
to
face
challenges
associated
with
growing
in
the
networking
equipment
industry,
which
amongst
other
require
investments
in
new
markets
and
products.
3
Confidential
The Boards recommendation to accept Infineras public offer
|
|
Strategic benefits to Transmode
There are a number of strategic benefits to Transmode from combining its
operations with Infinera:
Differentiated
and
comprehensive
product
portfolio
with
Transmode
Metro
aggregation
and
access
products,
combined
with
Infinera
long-haul
products
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
Complementary
geographical
footprint
with
Transmode
strengths
in
Europe
and
Infinera
strengths
in
North
America
Cross-selling
opportunities
to
complementary
customer-bases
Addressing
a
larger
portion
of
the
optical
networking
market
and
engineer
better
products
with
fast
time-to-market
4
Confidential |
|
Employees
For the near-term, Infinera does not intend to make any material changes to
Transmodes employees or to Transmodes existing organization and
operations, including the terms of employment and locations of the
business. Each companys engineering structure is anticipated to remain
substantively intact and Infinera intends to have Transmodes 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 Companys optimal
structure and staffing
It is expected that the Combined Company will maintain Infineras and
Transmodes current facilities. The exact structure and assignments of
the Combined Companys senior management team will be determined over
the course of the integration.
5
Confidential
Source: Infinera press release,
Public Offer |
|
The
offer in brief The total Offer consideration consists of a mixture of
cash and new shares of common stock in Infinera, which
values each Transmode share at SEK 109. Infinera is
offering each Transmode shareholder:
For
every 10 shares of Transmode, shareholders will receive SEK 300 in
cash and approximately 4.705 Infinera Shares
In prior to recommending the offer, the Board initiated a
third-party fairness opinion to evaluate the offer. This
opinion determined that the price was a fair from from a
financial point of view for shareholders
full details in
the Transmode board press release
6
Confidential |
|
Who
is Infinera Innovator & Leader
Founded 2001, IPO as INFN
2007 (NASDAQ)
Use unique Photonic Integrated Circuits (PICs)
DWDM platforms, Intelligent Transport Networks
400+ Patents Filed/Granted
#1 Optical company WW rated by Infonetics
Global
~1,500 employees
Headquarters Sunnyvale, CA, USA
Silicon Valley innovation, Global presence
8
Confidential
Source: Infinera |
|
Infinera Momentum
Leader
in
Intelligent
Transport
Network
solutions
20%+ YoY revenue growth 2 consecutive years, 2x market growth rate
140 customers in 73 countries; 59 DTN-X customers
Diversified customer base across multiple verticals
-
7 Tier 1s globally
-
3 of top 4 Internet Content Providers
-
4 of top 5 NA Cable/MSOs
-
Multiple top Wholesale & Enterprise Carriers
9
Confidential
Source: Infinera |
|
Transition to multi-market; Right Products at the Right Time
10
Confidential
Source: Infinera estimates based on customer and analyst interaction
|
|
The
combination of Infinera and Transmode 12
Confidential
Metro Edge
Metro Aggregation
Metro Core
$15.3B (2018)
Transport Market
Infinera
Transmode
Source: Infinera
LH Core
Cloud |
|
Complementing
products
13
Confidential
Metro Access/ Edge/Core
Metro Aggregation
Cloud
LH Core
Ability to Service the Full Transport Market
TM-Series
DTN-X
XTC4/10
Cloud Xpress
Rich Eth.
Biz Service
Storage
Networks
FTTx/PON
Triple Play
xDSL
Triple Play
CATV/MSO
Triple Play
Mobile Back/
Front-haul
XTC4
SDN Enabled Portfolio
Source: Infinera
Sliceable Photonics |
|
Complementing geographic markets
14
Confidential
Neptune
Poseidon
Poseidon
Neptune
Neptune
Poseidon |
|
Indicative timetable
16
Confidential
Key Events
April
May
June
July
Announcement/Press release
Preparation of offer document and
Swedish Financial Supervisory
Authority (Finansinspektionen)
review
Estimated date for announcement of
the offer document
Estimated acceptance period
Estimated settlement date
9 April
29 July
25 June
26 June -
17 July
~11 weeks |
|
Information
13:00 CET All staff presentation by Tom Fallon, CEO, Infinera
16:00 CET All staff meeting at 16:00 CET (repeat of 9 am meeting)
All
questions
that
you
receive
from
investors/media
please
refer
to
Jenny Gunell
Frequent staff meetings to update you on the progress
Information will be published on the Intranet
Questions
can
be
sent
to
questions@transmode.com
Confidential |
|
Disclaimer
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 Infineras website (www.infinera.com) under the
heading
SEC
Filings
in
the
CompanyInvestor
Relations
portion
of
Infineras
website.
18
Confidential |
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 Infineras #1 position in 100G WDM (ex-China) with Transmodes #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 Transmodes 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 Infineras strength in the long-haul optical transport market and its early lead in the metro Cloud
market, Transmodes 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. Transmodes 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. Transmodes 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 |
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, Infineras 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 Infineras 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 Infineras non-GAAP earnings in the second half of 2015, and accretive to
Infineras 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.
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 Transmodes outstanding shares, that any of the other closing conditions are not
satisfied, and that the transaction may not close; the risk that Transmodes and Infineras 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
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 Infineras website at http://www.Infinera.com/ under the heading SEC Filings in the
CompanyInvestor Relations portion of Infineras 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.
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. Transmodes shares are listed on
Nasdaq Stockholm, Mid Cap. The Offer accelerates Infineras vision of providing the worlds 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. |
2(20)
|
|
|
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 Transmodes 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 Transmodes Board of
Directors handling of, or decisions relating to, the Offer. |
3(20)
|
|
|
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 Infineras 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 Infineras 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 Infineras 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. Transmodes 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. |
4(20)
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 Infineras 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 Companys 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. Infineras historical strength is in the North American long-haul market, while
Transmodes 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 Infineras 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.
5(20)
Management and employees
Infinera recognizes the skills and capabilities of Transmodes 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 Transmodes employees or to Transmodes existing organization and operations, including the terms of employment and locations of the business. Each companys
engineering structure is anticipated to remain substantively intact and Infinera intends to have Transmodes 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 Companys optimal structure and staffing.
Infineras 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. |
6(20)
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 Infineras 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 shareholders 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 Infineras 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. |
7(20)
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 Stockholms 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 Transmodes 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. |
8(20)
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 Pods 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
Pods 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
Transmodes Board of Directors handling of, or decisions relating to, the Offer. |
9(20)
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
Infineras or the third partys 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.
Pods 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 Pods 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 Infineras 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 Infineras 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) |
Infineras 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); |
10(20)
|
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 Transmodes 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 Infineras 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. Infineras shares are traded on the NASDAQ Global
Select Market. Infinera was incorporated in December 2000, and is headquartered in Sunnyvale, California, USA. Infineras 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. Infineras 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. Infineras 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. |
11(20)
More information regarding Infinera is available on Infineras website, www.infinera.com, and on
the SECs 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 Transmodes 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 Transmodes 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.
12(20)
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. Transmodes 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. Transmodes 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 Transmodes 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 Infineras 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 Infineras ability to more fully address the fast
growing 100G Metro market.
17 |
All dates are preliminary and may be subject to change. |
13(20)
Product strategy
Infinera would seek to integrate Transmodes portfolio of products and solutions under a common network management umbrella, which is anticipated to be
Infineras 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 companys 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 companys engineering structure is anticipated to remain substantively intact and Infinera intends to have Transmodes 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 Companys 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 Transmodes 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 Infineras and Transmodes current facilities. The exact structure and assignments of the Combined Companys 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 Companys prospects, the Combined Company does not currently intend to pay a shareholder dividend in the near future.
Shareholder structure
The Combined Companys top
three shareholders (based on Infineras shareholder structure as of 28 March 2015 and assuming full acceptance of the Offer) will be:
|
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.
|
14(20)
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 Infineras 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 companys 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 Companys 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
Companys 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. |
15(20)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 Infineras 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. Infineras 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. |
16(20)
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 Councils (Sw. Aktiemarknadsnämnden) rulings and statements on the interpretation and
application of the Takeover Rules, including, where applicable, the Swedish Securities Councils 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.
17(20)
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 |
18(20)
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.
19(20)
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 Infineras
website (www.infinera.com) under the heading SEC Filings in the CompanyInvestor Relations portion of Infineras 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 Transmodes outstanding shares, that any of the other closing conditions are not satisfied, and that the transaction may not close; the risk that
Transmodes and Infineras 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
20(20)
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 Infineras 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.
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Based on Infineras 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 Infineras 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 Infineras Offer announcement.
In Infineras 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 Transmodes 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 Infineras 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 Boards recommendation
The Boards 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, Transmodes present position, the expected future development of the Company and thereto related possibilities and risks.
In the Boards 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 Companys 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.
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 Transmodes 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 Transmodes 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 Infineras strategic plans for Transmode
and the impact these could be expected to have on employment and on Transmodes business locations. The Board notes that Infinera in its offer announcement states that Infinera recognizes the skills and capabilities of Transmodes
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 Transmodes employees or to Transmodes existing
organization and operations, including the terms of employment and locations of the business. Each companys engineering structure is anticipated to remain substantively intact and Infinera intends to have Transmodes 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 companys optimal structure and staffing. The Board has no reason to question these statements regarding employment, Infineras strategic plans for Transmode and the impact these could
be expected to have on employment and on Transmodes business locations.
Based on the above, the Board of Directors unanimously recommends
Transmodes shareholders to accept Infineras Offer.
As part of the Boards evaluation of the Offer, the Board has engaged Lazard as
financial advisors and Hannes Snellman as legal advisors.
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. Transmodes 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. Transmodes 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 Infineras website (www.infinera.com) under the heading SEC Filings in the CompanyInvestor Relations portion
of Infineras website.
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.
Transmodes 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 Transmodes other advisors; and |
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internal reports and materials compiled by Transmodes 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. Infineras 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
Swedish law is applicable on this Fairness Opinion.
Lenner & Partners Corporate Finance AB
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/s/ Lars Lenner |
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/s/ Patrik Tillman |
Lars Lenner |
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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 Corporations 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.
Transmodes 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.
Transmodes 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. Transmodes 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. Transmodes 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
This announcement makes reference to Infinera Corporations 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 Infineras website (www.infinera.com) under the heading SEC Filings in the
CompanyInvestor Relations portion of Infineras website.
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