Avanex to Acquire Alcatel's Optical Components Division And Assets of Corning's Optical Components Business Transactions Expected to Increase Financial Resources, Broaden Product Offering and Strengthen Technology Profile
FREMONT, Calif., CORNING, N.Y., and PARIS, May 12, 2003 /PRNewswire via COMTEX/
-- Avanex Corporation (Nasdaq: AVNX), a global pioneer of cost-effective,
high-performance intelligent photonic processing subsystem and module solutions
designed to unleash the power of the optical layer in telecommunications
networks, Alcatel (PARIS: CGEP.PA) (NYSE: ALA), and Corning Incorporated (NYSE:
GLW) jointly announced today the signing of a definitive agreement pursuant to
which Avanex will acquire Alcatel's and Corning's optical components businesses
in combined transactions valued at approximately $63.5 million based on Avanex's
May 9, 2003 closing price of $1.12 per share.
The acquisitions by Avanex will combine the complementary optical business
capabilities of three of the industry's leading providers of optical components,
modules and subsystems for fiber optic transmission networks, and enable Avanex
to offer one of the broadest lines of advanced optical technologies and
intelligent photonic solutions to enhance the speed and capacity of optical
communications systems. After the acquisitions, Avanex will offer products that
address optical wavelength generation and modulation, multiplexing and
demultiplexing, signal amplification, wavelength routing and dispersion
compensation. Avanex estimates that after the acquisitions, it will have over
$250 million in cash and 1,600 employees on the closing date.
Walter Alessandrini, Chairman, President and Chief Executive Officer of Avanex,
noted today that, "Our acquisition of these two complementary businesses is a
logical, timely and appropriate step for success in today's market environment.
These acquisitions position Avanex as an industry leader with a broad customer
base, full suite of industry-leading products, competitive cost structure,
strong manufacturing expertise and worldwide R&D capabilities. In addition,
there is significant potential for synergies arising from these transactions
including immediate opportunities for cost reductions and incremental sales."
"Avanex's strategy is to be the leading supplier of optical solutions. Our
customers want suppliers who can deliver end-to-end solutions that are cost-
effective and of the highest quality. After the acquisitions of Alcatel's
optical components division and certain optical component business lines from
Corning, Avanex will have the scale and resources to effectively supply our
customers with their product needs."
As part of this transaction:
Alcatel and Corning will receive as consideration 28% and 17% respectively of
Avanex's outstanding common stock of the post-transaction company, which
currently translates into approximately 35.2 and 21.4 million shares. Following
the transaction, Alcatel and Corning have agreed to certain restrictions on the
voting and transfer of their Avanex shares.
Avanex will acquire all outstanding equity of Alcatel's optical components
division. This business will include key operations located in France and the
United Kingdom.
Alcatel is expected to contribute over $110 million in cash, to be finalized at
closing.
Avanex and Alcatel will enter into a supply agreement whereby Avanex will supply
solutions for Alcatel's optical networking products over a three-year period.
Assets to be purchased from Corning include optical amplifier, dispersion
compensation, and micro optics operations located in New York and Corning
modulator operations located in Italy.
Corning is expected to contribute over $20 million in cash, to be finalized at
closing.
Alcatel and Corning will assign approximately 1,400 patents to Avanex and
additionally license several thousand patents to Avanex as part of the
transaction.
At closing, Dr. Joseph A. Miller Jr., senior vice president and chief technology
officer of Corning, is expected to join the Avanex Board of Directors.
Alcatel's optical component division had sales of EURO 7.3 million for its March
2003 quarter. The division's products include lasers, photodetectors, optical
amplifiers, transponders and key passive devices such as arrayed waveguide
gratings and Fiber Bragg grating filters. Alcatel's optical component division
had 950 employees as of March 31, 2003.
The business lines to be acquired from Corning had sales of approximately $11
million for the March 2003 quarter. Key products from these business lines
include optical amplifiers, dispersion compensation modules, Lithium Niobate and
electro-absorptive modulators, and micro optics products. These business lines
had 490 employees as of March 31, 2003.
The companies anticipate closing the transaction by the end of Avanex's first
fiscal quarter, ending September 30, 2003, subject to customary closing
conditions, including the approval of the stockholders of Avanex and required
regulatory approvals. The Boards of Directors of all three companies have
approved the transaction.
Citigroup Global Markets Inc. is acting as exclusive financial advisers to
Avanex with respect to this transaction.
Conference Call
Avanex will host a conference call today, May 12, at 4:30 p.m. EDT. The domestic
dial-in number for the conference call is 888-220-3086 and the international
dial-in number is 630-395-0144. The password for both domestic and international
callers is "Photonics." A replay of the conference call will be available
through May 19, 2003 at 402-998-1011.
Additional information about the acquisitions and where to find it
Avanex will file a proxy statement describing the transaction with the United
States Securities and Exchange Commission (SEC). In addition, Avanex will file
other information and documents concerning the transaction and its business with
the SEC. WE URGE INVESTORS IN THE COMMON STOCK OF AVANEX TO REVIEW THE PROXY
STATEMENT AND OTHER INFORMATION TO BE FILED WITH THE SEC BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. These documents will be available without charge
on the SEC's web site at www.sec.gov and may be obtained without charge from the
SEC at telephone number 800-SEC-0330. INVESTORS SHOULD READ THE PROXY STATEMENT
CAREFULLY BEFORE MAKING ANY VOTING OR INVESTMENT DECISIONS.
Avanex's executive officers and directors may be deemed to be participants in
the solicitation of proxies from the stockholders of Avanex in favor of the
share issuances in connection with the acquisitions. A description of the
interests of Avanex's executive officers and directors in Avanex is set forth in
the proxy statement for Avanex's 2002 Annual Meeting of Stockholders, which was
filed with the SEC on September 23, 2002. Investors and security holders may
obtain more detailed information regarding the direct and indirect interests of
Avanex's executive officers and directors in the acquisitions by reading the
proxy statement filed with the SEC when it becomes available.
About Avanex
Avanex designs, manufactures and markets photonic processors for the
communications industry. Avanex's photonic processors offer communications
service providers and optical systems manufacturers greater levels of
performance and miniaturization, reduced complexity and increased cost-
effectiveness as compared to current alternatives. |
