-- 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 (Contact Information: Contacts: Steve Workman CFO Finisar Corporation 408-548-1000 Victoria McDonald Director, Corporate Communications Finisar Corporation 408-542-4261 victoria.mcdonald@finisar.com Dave Renner CFO Optium Corporation 267-803-3800 Veronica Rosa Director, Investor and Public Relations Optium Corporation 267-803-3801 vrosa@optium.com