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Infinera Announces Offer to Acquire Transmode PDF Icon

April 8, 2015

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 2019
  • Aligns Infinera’s #1 position in 100G WDM (ex-China) with Transmode’s #1 position in metro packet optical in EMEA
  • Timing enables combined company to capitalize on increased expected spending on transport within metro infrastructures
  • Expected to be accretive to non-GAAP EPS in 2016

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

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

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

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

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

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

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

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

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

Infinera Contacts:

Media (Europe):
VERO Communications
Johan Tamsen, Tel. +46 (0)8 611 38 30,

Media (Rest of World):
Anna Vue, Tel. +1 (916) 595-8157,

Investors (Europe):
Morgan Stanley & Co International plc
Erik Tregaard, Tel. +46 (0)8 678 96 00,

Investors (Rest of World):
Jeff Hustis, Tel: +1 (408) 213-7150,

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, follow us on Twitter @Infinera and read our latest blog posts at

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

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

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.