Looking to enhance its metro packet-optical strategy and expand its global reach, Infinera has made a $350 million offer for Sweden’s Transmode.
Infinera plans to acquire Transmode with $96 million in cash and the issuance of approximately 13 million new Infinera shares to Transmode shareholders. They hope to close the deal in the third quarter of Infinera’s fiscal year 2015.
Infinera said the deal, which targets Transmode’s suite of metro core, edge and access products, will complement its long-haul optical transport market and its position in the metro cloud market. The acquisition will also help it capitalize on the transition of major 100G metro aggregation deployments expected by industry analysts to commence in 2016, Infinera added.
Infinera said it “does not intend to make any material changes to Transmode's employees or to Transmode's existing organization and operations, including the terms of employment and locations of the business.” It also expects to have Transmode's current CEO, Karl Thedéen, lead the Metro Aggregation business operations of the combined company
“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, in a statement. "Transmode's services-rich metro platforms, broad European customer base and profitable business model are naturally complementary to Infinera.”
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.
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.
