SAN JOSE, Calif., Nov.
4, 2021 /PRNewswire/ -- Lumentum Holdings Inc. (NASDAQ:
LITE) ("Lumentum") and NeoPhotonics Corporation (NYSE: NPTN)
("NeoPhotonics") today announced that they have entered into a
definitive agreement under which Lumentum will acquire
NeoPhotonics for $16.00 per
share in cash, which represents a total equity value of
approximately $918 million. The transaction has been
unanimously approved by the Boards of Directors of both
companies.
The addition of NeoPhotonics expands Lumentum's
opportunity in some of the fastest growing areas of the more
than $10 billion market for optical
components used in cloud and telecom network infrastructure. The
integrated company will be better positioned to serve the needs of
a global customer base who are increasingly utilizing
photonics to accelerate the shift to digital and virtual approaches
to work and life, the proliferation of IoT, 5G, and
next-generation mobile networks, and the transition
to advanced cloud computing architectures. The combination
creates a stronger partner for customers, with the ability and
intent to invest strongly in innovation and manufacturing
capacity.
"With NeoPhotonics, we're making another important
investment in better serving our customers and expanding our
photonics capabilities at a time when photonics are at the
forefront of favorable long-term market trends," said Alan Lowe, Lumentum President and CEO. "At the
center of our strategy is a relentless focus on developing a
differentiated portfolio with the most innovative products and
technology in our industry so that we can help our customers
compete and win in their respective markets. Adding
NeoPhotonics' differentiated products and technology and
innovative R&D team is consistent with this strategy and
together, we will better meet the growing need for next generation
optical networking solutions."
"We are confident this transaction will make us an even better
partner to our customers, while enabling our team to deliver
significant, long-term value to our stockholders. We look forward
to welcoming NeoPhotonics' talented team of employees to
Lumentum," concluded Mr. Lowe.
"Today's announcement is an exciting milestone for
NeoPhotonics," said Tim Jenks,
NeoPhotonics President, CEO, and Chairman. "The
increasing global demand for our ultra-pure light tunable lasers
and photonics technologies for speed over distance applications is
more apparent than ever, and Lumentum is the ideal partner to serve
our customers on a larger scale. Lumentum recognizes the importance
of NeoPhotonics' differentiated photonic technology and
products, which are well positioned for accelerated growth in the
coming years. The combination's complementary product portfolio,
increased scale, breadth of customer application knowledge, and
R&D capabilities will accelerate innovation, better serve
customers, and deliver significant and immediate value to our
stockholders. Importantly, this transaction is a testament to the
hard work and dedication of our employees. I look forward to
working with Lumentum leadership to ensure a smooth transition as
we begin an exciting new chapter as one company."
Compelling Strategic and Financial Benefits
- Comprehensive Capabilities for the Significant 400G+ Optical
Network Opportunity: The complementary combination accelerates
Lumentum's exposure to and penetration of some of the fastest
growing portions of the more than $10
billion market for optical components used in cloud and
telecom network infrastructure. Internet, cloud, mobile, and
broadband access network capacity requirements continue to grow at
an unrelenting pace driven by the digital transformation of work
and life, high-bandwidth video, gaming, and other applications. The
combined company will have a broader portfolio of next generation
products and technologies addressing the market opportunity created
by the strong growth in network capacity requirements created by
these applications.
- Positioned to Better Serve Market Leading Customers: The
combined company will comprise a solid financial position and the
ability to invest in new products, technologies, and manufacturing
capabilities, with a broader portfolio of products and technology
relevant to global leaders in cloud and communications networks
infrastructure. This transaction underscores Lumentum's commitment
to the photonics and communications markets, and the combined
company will continue to heavily invest in innovation and
manufacturing capabilities in order to meet and exceed customers'
photonics needs – today and into the future.
- Accelerated Innovation from Combined R&D and Technology
Capabilities Globally: The combination increases the scale and
scope of Lumentum's innovation engine globally. The company will
benefit from R&D and manufacturing capabilities globally across
Asia, North America, and Europe. With a broader global talent pool,
Lumentum will be well positioned to accelerate innovation and
collaborate more closely with market and technology-leading
customers worldwide.
- Poised to Capture Attractive New Growth Opportunities:
Photonics will play an increasing role in new approaches to
automobiles and delivery vehicles, manufacturing, industrial
sensing, safety and security, health care and the life sciences,
and addressing climate change. The combined organization will be
poised to capture new market growth opportunities created by these
trends due to the combined R&D innovation engine and technology
base. The combination's breadth of technology and vertical
integration, from underlying components and materials to
sub-systems and systems, increases the ability to participate in
the technology stack of new end market customers increasingly
utilizing photonics.
- Delivers Substantial Run-Rate Synergies and Solid Accretion
to Lumentum's Earnings: There are significant efficiency gains
in combining derived from increased scale, reducing redundancies,
and leveraging the best capabilities in the combination. The
combined company is expected to generate more than $50 million in annual run-rate synergies within
24 months of the closing of the transaction. The transaction is
expected to be immediately accretive to the combined company's
non-GAAP earnings per share upon closing. The combined company is
expected to have a solid balance sheet and strong operating cash
flows, creating substantial financial flexibility to pursue
continued growth initiatives.
Transaction Terms, Financing, and Approvals
The purchase price represents a premium of approximately 39% to
NeoPhotonics' closing stock price on November 3, 2021. Lumentum intends to finance the
transaction through cash from the combined company's balance
sheet.
Related to the transaction, Lumentum will provide up to
$50 million in term loans to NeoPhotonics to fund
anticipated growth, which may require increased working capital and
manufacturing capacity.
The transaction is expected to close in the second half of
calendar year 2022, subject to approval by
NeoPhotonics' stockholders, receipt of regulatory approvals,
and other customary closing conditions.
Advisors
Goldman Sachs & Co. LLC served as the exclusive financial
advisor to Lumentum and Wilson Sonsini
Goodrich & Rosati, Professional Corporation served as
legal advisor. Union Square Advisors LLC served as exclusive
financial advisor to NeoPhotonics and Cooley LLP served as
legal advisor.
Transaction Conference Call and Lumentum First Quarter Fiscal
2022 Earnings Results
In separate press releases issued today, Lumentum and
NeoPhotonics announced financial results for their first
quarter fiscal 2022 and third quarter fiscal 2021, respectively.
The Lumentum press release is available at
http://investor.lumentum.com. The NeoPhotonics' press
release is available at http://ir.neophotonics.com. In light
of today's transaction announcement, NeoPhotonics has
cancelled its previously announced conference call for November 4 at 1:30 p.m.
PT/4:30 p.m. ET.
The Companies will hold a joint conference call today, November
4, 2021 at 5:30 a.m.
PT/8:30 a.m. ET to discuss
today's announcement, as well as Lumentum's first quarter
financial results. A live webcast of the call and the replay
will be available on the Lumentum website at
http://investor.lumentum.com. Supporting materials for the
call's presentation will be posted on
http://investor.lumentum.com under the "Events and
Presentations" section prior to the call and
on http://ir.neophotonics.com.
A conference call replay will be available from November 4, 2021, at 11:30
a.m. ET through November 11, 2021, at 11:59 p.m. ET. To listen to the live conference
call, dial (844) 200-6205 (U.S.) or (929) 526-1599
(international) and reference the passcode 319529. To
access the replay, dial (866) 813-9403 (U.S.) or (929) 458-6194
(international) and reference the passcode 908228.
This press release is being furnished as an exhibit to a Current
Report on Form 8-K filed with the Securities and Exchange
Commission and will be available at http://www.sec.gov/.
About Lumentum
Lumentum (NASDAQ: LITE) is a major designer and manufacturer of
innovative optical and photonic products enabling optical
networking and laser applications worldwide. Lumentum optical
components and subsystems are part of virtually every type of
telecom, enterprise, and data center network. Lumentum lasers
enable advanced manufacturing techniques and diverse applications
including next-generation 3D sensing capabilities. Lumentum is
headquartered in San Jose,
California with R&D, manufacturing, and sales offices
worldwide. For more information, visit www.lumentum.com.
About NeoPhotonics
NeoPhotonics (NYSE: NPTN) is a leading developer and
manufacturer of lasers and optoelectronic solutions that transmit,
receive and switch high-speed digital optical signals for Cloud and
hyper-scale data center internet content providers and telecom
networks. The Company's products enable cost-effective, high-speed
over distance data transmission and efficient allocation of
bandwidth in optical networks. NeoPhotonics maintains
headquarters in San Jose,
California and ISO 9001:2015 certified engineering and
manufacturing facilities in Silicon Valley (USA), Japan
and China. For additional
information visit www.neophotonics.com.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements generally relate to future
events, including the timing of the proposed transaction and other
information related to the proposed transaction. In some cases, you
can identify forward-looking statements because they contain words
such as "may," "will," "should," "expects," "plans," "anticipates,"
"could," "intends," "target," "projects," "contemplates,"
"believes," "estimates," "predicts," "potential" or "continue" or
the negative of these words or other similar terms or expressions
that concern the proposed transaction and our expectations,
strategy, plans or intentions regarding it. Forward-looking
statements in this communication include, but are not limited to,
(i) expectations regarding the timing, completion and expected
benefits of the proposed transaction, (ii) plans, objectives and
intentions with respect to future operations, customers and the
market, and (iii) the expected impact of the proposed transaction
on the business of the parties. Expectations and beliefs regarding
these matters may not materialize, and actual results in future
periods are subject to risks and uncertainties that could cause
actual results to differ materially from those projected. These
risks include the risk that the transaction may not be completed in
a timely manner or at all; the ability to secure regulatory
approvals on the terms expected in a timely manner or at all; the
effect of the announcement or pendency of the transaction on our
business relationships, results of operations and business
generally; risks that the proposed transaction disrupts current
plans and operations; the risk of litigation and/or regulatory
actions related to the proposed transaction; potential impacts
of the Covid-19 pandemic; changing supply and demand
conditions in the industry; and general market, political, economic
and business conditions. The forward-looking statements
contained in this communication are also subject to other risks and
uncertainties, including those more fully described in filings with
the Securities and Exchange Commission, including reports
filed on Form 10-K, 10-Q and 8-K and in other filings made by
NeoPhotonics and Lumentum with the SEC from time to time and
available at www.sec.gov. These forward looking statements are
based on current expectations, and with regard to the proposed
transaction, are based on Lumentum's and NeoPhotonics' current
expectations, estimates and projections about the expected date of
closing of the proposed transaction and the potential benefits
thereof, its business and industry, management's beliefs and
certain assumptions made by NeoPhotonics and Lumentum, all of which
are subject to change.
The parties undertake no obligation to update the information
contained in this communication or any other forward-looking
statement.
Additional Information and Where to Find It
This communication is being made in respect of a proposed
business combination involving Lumentum and NeoPhotonics.
NeoPhotonics will file relevant materials with the Securities and
Exchange Commission (the "SEC") in connection with the proposed
transaction, including a proxy statement on Schedule 14A. Under the
proposed terms, promptly after filing its proxy statement with the
SEC, NeoPhotonics will mail or otherwise make available the proxy
statement and a proxy card to each stockholder entitled to vote at
the annual meeting relating to the proposed transaction.
NEOPHOTONICS STOCKHOLDERS AND OTHER INVESTORS ARE ADVISED TO
CAREFULLY READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR
SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS FILED WITH
THE SEC IN RESPECT OF THE PROPOSED TRANSACTION WHEN THEY BECOME
AVAILABLE, AS THOSE DOCUMENTS WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION AND THE PARTIES TO THE PROPOSED
TRANSACTION.
LUMENTUM AND NEOPHOTONICS URGE INVESTORS AND SECURITY HOLDERS TO
READ THE PROXY STATEMENT AND OTHER DOCUMENTS FILED WITH THE SEC
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED
TRANSACTION.
Investors and security holders will be able to obtain these
materials (when they are available and filed) free of charge at the
SEC's website, www.sec.gov. Copies of documents filed with the SEC
by Lumentum (when they become available) may be obtained free of
charge on Lumentum's website at www.lumentum.com or by contacting
Lumentum's Investor Relations Department at
investor.relations@lumentum.com. Copies of documents filed with the
SEC by NeoPhotonics (when they become available) may be obtained
free of charge on NeoPhotonics' website at
https://ir.NeoPhotonics.com or by contacting NeoPhotonics' Investor
Relations at ir@neophotonics.com.
Participants in the Solicitation
The directors and executive officers of NeoPhotonics may be
deemed to be participants in the solicitation of proxies from the
stockholders of NeoPhotonics in connection with the proposed
transaction. Information regarding the interests of these
directors and executive officers in the transaction described
herein will be included in the proxy statement described above.
Additional information regarding NeoPhotonics' directors and
executive officers is also included in NeoPhotonics' proxy
statement for its 2021 Annual Meeting of Stockholders, which was
filed with the SEC on April 16, 2021.
These documents are available free of charge as described in the
preceding paragraph.
Category: Financial
Contact Information
Lumentum
Investors: Jim
Fanucchi, (408) 404-5400,
investor.relations@lumentum.com
Media: Eric Brielmann or Kaitlin Kikalo, Joele
Frank, Wilkinson Brimmer Katcher, (212) 355-4449
NeoPhotonics
Investors: Sapphire Investor
Relations, LLC, Erica Mannion,
Investor Relations, (617) 542-6180, ir@neophotonics.com
Media: LouVan Communications, Inc., Michael Newsom, (617) 803-5385,
mike@louvanpr.com
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SOURCE Lumentum Holdings Inc.