Infinera to acquire Transmode

NEW DELHI: Telecom solutions provider Infinera is mulling to acquire Transmode, metro packet-optical networking solutions provider, through a public offer.

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.

Infinera will deliver about $96 million in cash, funded from its balance sheet, and will issue 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 offer is expected to close in the third quarter of Infinera's fiscal year 2015, subject to certain closing conditions.

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, a release said.

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 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.

"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.