Transmode

These solutions are an important component of the high-speed optical network of the next generation supporting such services as transport of a broadband network of access, a mobile network, network of delivery of video of content and cloud computing. The solutions Transmode are based based on technologies of spectral channel separation (WDM) and optical package transport, intended for increase in capacity, flexibility and functionality of a core and access of the subway of network. Unique approach of Transmode iWDM™ (Intelligent WDM) provides Customers with key advantages, such as ultralow delay, low power consumption and the innovation design of network.

Transmode is based in Stockholm, Sweden. Since 2000 more than 30000 systems for more than 400 fixed and mobile operators, providers of services, corporate Customers and the state institutes in more than 40 countries in Europe, America and Asia are delivered.

2015: Transmode agreed with Infinera about absorption

On April 15, 2015 the Infinera company announced intention to purchase Transmode company.

Absorption should strengthen the offer of Infinera in the market of city packet optical networks and build a complex product portfolio in this market.

• The product offer purchased with Transmode will add a portfolio of DWDM solutions for longhaul networks, city and cloud networks. According to forecasts the size of the market of similar products will reach $15 billion by 2019.

• Holding the first place in the world ranking of producers of WDM solutions for networks 100G (except for China), Infinera will get strategic advantage combining efforts with Transmode, in the market of solutions for city packet optical networks in EMEA region.

• The moment of the transaction is successful in terms of strategic development of business: the company relies upon increase in demand for solutions for transport networks of city infrastructures.

• It is expected that the transaction will promote growth of an income per share (according to the non-GAAP standard) in 2016.

Infinera begins to expand the business in the market of technologies of city cloud networks, new to it. Therefore, a complex solution portfolio for city networks (the kernel level, boundary and terminal connections) which offers Transmode, will give to Infinera company an opportunity of complete market coverage of WDM solutions and will open new opportunities of profit earning in connection with active junction of city networks on 100G which, according to forecasts of analysts, will begin in 2016.

Infinera and Transmode supplement each other from the point of view of clients and the used technologies: Transmode concentrates, generally in the market of city networks in Europe, and Infinera is in the lead in the field of longhaul networks and cloud networks in North America.

According to the management of Infinera, acquisition of Transmode will accelerate implementation of a long-term strategic objective of the company – the offer to clients of a complex solution portfolio for world-class optical transport networks.

In accordance with the terms Offers, shareholders will receive cash in the amount of 300 Swedish kronur and 4.705 stocks Infinera for each 10 stocks of Transmode. The cost of purchase means the price for an action in the amount of 109 Swedish kronur, at capitalization of Transmode estimated approximately at $350 million.

In total Infinera will pay about $96 million the cash withdrawn from balance of the company will transfer about 13 million new stocks of Infinera to shareholders of Transmode. For December 27, 2014 the volume of available cash of means on balance of Infinera company was made by about $391 million. As a result of the transaction shareholders of Transmode will own 8.7% of the united company (holding watered shares).

Absorption is approved by Board of Directors of Infinera and it is unanimously recommended Board of Directors of Transmode. Closing of the transaction is planned for the third quarter of 2015 financial year of Infinera, on condition of compliance to a number of requirements, including a broadcast of 90% of stocks Transmode and other, earlier resolutive conditions.

It is expected that the transaction will render the neutral or slightly watering effect on income of Infinera according to the non-GAAP standard in the second half of the year 2015 and will promote increase in income of Infinera on non-GAAP in 2016.