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Finisar and Optium Agree to Combine in All-Stock Merger
(Marketwire Via Acquire Media NewsEdge) SUNNYVALE, CA, and HORSHAM, PA, May 16 / MARKET WIRE/ --
Finisar Corporation (NASDAQ: FNSR) and Optium Corporation (NASDAQ: OPTM) jointly announced today that
they have entered into a definitive agreement under which the two companies
will be combined through an all-stock merger, creating the world's largest
supplier of optical components, modules and subsystems for the
communications industry. The combined company will leverage Finisar's
leadership position in the storage and data networking industries and
Optium's leadership position in the telecommunications and CATV industries.
Both companies also jointly announced today that they expect to report new
record revenues for their most recent quarters.
Overview of Strategic Combination
-- Creates the world's largest supplier of optical components, modules
and subsystems to the communications industry with the broadest product
portfolio;
-- Generates new growth opportunities in attractive end markets;
-- Broadens core customer relationships with complementary product
portfolios;
-- Enhances global manufacturing flexibility combining low cost/high
volume and mass customization expertise;
-- Creates unparalleled combined R&D resources with enhanced ability to
innovate and bring new products to market;
-- Transaction expected to be accretive to non-GAAP earnings on a run-
rate basis one year from closing;
-- Estimated annualized pre-tax cost synergies of approximately $10-$15
million;
-- Jerry Rawls to remain executive Chairman of Finisar's board; Eitan
Gertel to become President and CEO.
Based on the twelve months through January 2008 reported by each company,
the combined company had revenues of approximately $554 million. Based on
revenues expected to be reported for the most recent quarter, annualized
revenues for the combined company would total approximately $660 million.
The combined company will have approximately 5,000 employees world-wide.
"This combination leverages the unique strengths of both companies," said
Eitan Gertel, Chairman and CEO of Optium Corporation. "In combining with
Finisar, we will unleash a powerful opportunity to create added shareholder
value through breadth of product, enhanced customer support and
manufacturing flexibility. With little product overlap, the proposed
combination will complement both companies by providing more choice for
customers, best-in-class technologies, focused technology innovation and
cost efficiencies to meet our customers' requirements. Customers and
employees will be treated with the utmost care in combining our two
companies."
"We are excited to combine with a successful company like Optium," said
Jerry Rawls, Chairman, President and CEO of Finisar Corporation. "Given
the scale required to be competitive in meeting global customer needs,
consolidation in the optical space is long overdue. In Optium, we have
found the perfect partner. Optium has strong product technologies
addressing some of the fastest growth markets in our industry. In
addition, Optium's fabless manufacturing model will allow us to more
readily capture the benefits of scale, while maintaining effective
resources to serve customized technology requirements. More importantly,
we believe both companies share a common culture that strives for
innovation while exceeding customer expectations."
Meaningful cost synergies totaling approximately $10-$15 million are
expected from the combination, with the substantial majority expected on a
run-rate basis one year from the closing. Economies of scale associated
with a larger purchasing base, rationalization of the combined
infrastructure and manufacturing flexibility driven by Finisar's vertical
integration and Optium's highly automated in-house manufacturing
capabilities are all expected to contribute to these cost synergies. The
transaction is expected to be accretive to earnings per share on a non-GAAP
basis in one year post-closing.
The combination is also expected to generate revenue synergies as a result
of having complementary product portfolios with substantial cross-selling
opportunities. Together, the combined company will offer the broadest
portfolio of optical communications products to equipment manufacturers.
Transaction Details
Under the terms of the merger agreement, which has been approved by the
boards of directors of both companies, Optium stockholders will receive
6.262 Finisar shares for each Optium share they own. Optium options and
warrants will represent a corresponding right to acquire a number of
Finisar shares based on the exchange ratio. Finisar is expected to issue
approximately 160 million common shares in the proposed combination. Upon
completion of the combination, Finisar shareholders will own approximately
65% of the combined company and Optium shareholders will own approximately
35% of the combined company. Shares of the combined company will continue
to trade on the NASDAQ Select Market under the symbol: FNSR. The
combination is intended to qualify as a tax-free reorganization for Federal
income tax purposes.
Upon the closing of the combination, Finisar's board of directors will be
reconstituted to include three new directors who are currently members of
Optium's board. Jerry Rawls, Chairman, President and CEO of Finisar, will
remain as the executive Chairman of Finisar's board. Eitan Gertel,
Chairman, President and CEO of Optium, will become Finisar's President and
CEO and will join Finisar's board along with Morgan Jones and Chris Crespi.
The proposed combination is subject to the approval of both companies'
stockholders. Certain directors and executive officers of each company, as
well as certain affiliates, have signed agreements to vote their shares in
favor of the proposed combination. These agreements apply to approximately
7% of Finisar's and 34% of Optium's outstanding shares, respectively.
The proposed combination is also subject to customary conditions including
required regulatory and other approvals. The combination is expected to
close in the third calendar quarter of 2008.
Oppenheimer & Co. is acting as Finisar's exclusive financial advisor and
DLA Piper US LLP is acting as Finisar's legal counsel. Morgan Stanley &
Co. is acting as Optium's exclusive financial advisor and Goodwin Procter
LLP is acting as Optium's legal counsel.
Finisar and Optium will each be filing the full text of the merger
agreement with the Securities and Exchange Commission (the "SEC") on Form
8-K within four business days of the date of this release. Investors and
security holders of each company are urged to review those filings for the
full terms of the proposed combination.
Both Companies Expect to Report Record Revenues for Their Most Recent
Quarters
Finisar announced today that its total revenues for the fourth fiscal
quarter ended April 30, 2008 are expected to be approximately $120 million,
a new record for the company. Finisar expects to announce its fourth
fiscal quarter and full fiscal year end results on June 12, 2008 (see
www.Finisar.com).
Optium announced today that its total revenues for the third quarter ended
May 2, 2008 are expected to be approximately $45 million, also a new record
for the company. Optium expects to announce its third quarter results on
June 5, 2008 (see www.Optium.com).
Teleconference and Webcast Information
Finisar and Optium will jointly host a conference call for the financial
community at 9 a.m. EDT/6 a.m. PDT May 16, 2008 to discuss this
announcement. The companies will also provide a webcast of the
teleconference on the Investor Relations pages of their respective
websites, at www.Finisar.com and www.Optium.com. A joint slide
presentation to be used in the conference call will be filed by each
company with the SEC and posted to the investor relations page of each
company's website prior to the conference call. The webcast replay will be
available on these sites within two days and will continue to be available
through June 30, 2008. Investors and other interested parties can also
access the conference call via telephone by dialing (877) 440-5791 (toll
free) or (719)-325-4922 (international). A dial-in replay of the
conference call will become available at the same time as the webcast
replay and be accessible until midnight May 31, 2008. The dial-in replay
number is (888) 203-1112 or (719) 457-0820 and the access code is 6055114.
About Finisar
Finisar Corporation (NASDAQ: FNSR) is a technology leader for fiber optic
components and subsystems and network test and monitoring systems. These
products enable high-speed data communications for networking and storage
applications over Gigabit Ethernet Local Area Networks (LANs), Fibre
Channel Storage Area Networks (SANs), and Metropolitan Area Networks (MANs)
using Fibre Channel, IP, SAS, SATA and SONET/SDH protocols. The Company's
headquarters is in Sunnyvale, CA, USA. Finisar has approximately 4,500
employees. For more information, visit http://www.Finisar.com.
About Optium
Optium Corporation (NASDAQ: OPTM) is a leading designer and manufacturer of
high-performance optical subsystems supporting core to the edge
applications for use in telecommunications and cable TV network systems.
Optium's broad suite of optical transport solutions features fixed and
wavelength agile 10Gb/s and 40Gb/s transceivers and subsystems, 10Gb/s
pluggable transceivers, cable TV trunking and distribution subsystems and
Optium's next generation WSS ROADM product line. Quoted on the NASDAQ
Global Market under the symbol "OPTM," Optium is headquartered in Horsham,
PA and has offices in Sydney, Australia and Nes Ziona, Israel. Optium has
approximately 400 employees. For more information, visit
http://www.Optium.com.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to, statements
related to the anticipated consummation of the proposed combination of
Finisar and Optium, the benefits of the proposed combination, the future
financial performance of Finisar after the proposed combination and each
company's expected reported revenues for its latest quarter. All
forward-looking statements included in this press release are based on
information available to Finisar and Optium as of the date of this press
release and current expectations, forecasts and assumptions of each
company.
Forward-looking statements involve risks and uncertainties which could
cause actual results to differ materially from those anticipated. In the
case of each company's expected revenues for its latest quarter, these
risks and uncertainties include adjustments to preliminary financial
results that may result from the completion of the normal quarterly
financial reporting process. In the case of the proposed combination of
Finisar and Optium, these risks and uncertainties include the risk that the
proposed combination may not close, including the risk that the requisite
stockholder and regulatory approvals may not be obtained; difficulties
that may be encountered in integrating the combined businesses and
realizing the potential synergies of the proposed combination; risks
associated with the rapidly evolving markets for both companies' products,
the historical dependence of each company on a limited number of
customers, and fluctuations in the mix of products and customers in any
period; the risks associated with ongoing new product development, and
introduction of new and enhanced products; the challenges of rapid growth
followed by periods of contraction; intensive competition; and the other
risks and uncertainties faced by each company, as reported in their most
recent respective Forms 10-K, Forms 10-Q and other filings with the SEC.
No forward-looking statements in this press release or those filings should
be relied upon as representing Finisar's or Optium's views or expectations
as of any subsequent date and neither company undertakes any obligation to
revise or update any such forward-looking statement to reflect events or
circumstances that may arise after the statement was made.
Important Additional Information
In connection with the proposed combination of Finisar and Optium, Finisar
plans to file with the SEC a Registration Statement on Form S-4 containing
a Joint Proxy Statement/Prospectus and Optium plans to file with the SEC
the same Joint Proxy Statement/Prospectus. The definitive Joint Proxy
Statement/Prospectus will be mailed to the stockholders of Finisar and
Optium after clearance with the SEC. Each company will also file with the
SEC from time to time other documents relating to the proposed combination.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ CAREFULLY THE JOINT PROXY
STATEMENT/PROSPECTUS WHEN IT IS FILED WITH THE SEC, AND OTHER DOCUMENTS
FILED BY EITHER FINISAR OR OPTIUM WITH THE SEC RELATING TO THE PROPOSED
COMBINATION WHEN THEY ARE FILED, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT THE PROPOSED COMBINATION.
Copies of the documents filed with the SEC by Finisar or Optium may be
obtained free of charge from the SEC website maintained at www.sec.gov. In
addition, Finisar's SEC filings may be obtained free of charge from
Finisar's website (www.Finisar.com) or by calling Finisar's Investor
Relations department at 408-542-5050 and Optium's filings may be obtained
free of charge from Optium's website (www.Optium.com) or by calling
Optium's Investor Relations department at 267-803-3801.
Each of Finisar and Optium, and its respective directors and executive
officers, may be deemed to be participants in the solicitation of proxies
from that company's respective stockholders in connection with the proposed
combination. Information about the directors and executive officers of
Finisar (including their respective ownership of Finisar shares) is
contained in Finisar's annual meeting proxy statement filed with the SEC on
February 21, 2008 and available free of charge in the manner described
above. Information about the directors and executive officers of Optium
(including their respective ownership of Optium shares) is contained in
Optium's annual meeting proxy statement filed with the SEC on November 13,
2007 and available free of charge in the manner described above.
Additional information regarding the interests of such participants in the
proposed combination will be included in the Joint Proxy
Statement/Prospects and the other documents filed by each company with the
SEC relating to the proposed combination (when filed).
Contacts:
Steve Workman
CFO
Finisar Corporation
408-548-1000
Victoria McDonald
Director, Corporate Communications
Finisar Corporation
408-542-4261victoria.mcdonald@finisar.com
Dave Renner
CFO
Optium Corporation
267-803-3800
Veronica Rosa
Director, Investor and Public Relations
Optium Corporation
267-803-3801vrosa@optium.com
Copyright ? 2008 Marketwire
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