- Filing of certain prospectuses and communications in connection with business combination transactions (425)
January 27 2009 - 5:03PM
Edgar (US Regulatory)
Filed by Bookham, Inc.
Pursuant to Rule 425 Under the Securities Act of 1933
And Deemed Filed pursuant to Rule 14a-12
Under the Securities Exchange Act of 1934
Subject Company: Avanex Corporation
Commission File: 000-29175
Leader In Optical Solutions
For Metro And Long Haul Telecom Networks
Alain Couder
CEO, Bookham
Giovanni Barbarossa
CEO, Avanex
January 27, 2009
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Page 1
This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act
of 1995. Such statements include, but are not limited to, statements about the timetable for completing the transaction,
the benefits of the business combination transaction involving Bookham and Avanex, including potential synergies and
cost savings and the timing thereof, future financial and operating results including Adjusted EBITDA in the first quarter
following the transaction and potential combined revenue, potential quarterly synergies and restructuring costs, the
combined company's plans and financial targets, cash balances together, objectives, expectations and intentions with
respect to future operations, products and services, potential growth in internet bandwidth demand, and other
statements identified by words such as "potential," "expected," "plan," "estimate," "intend," "will," or words of similar
meaning. Such forward-looking statements are based upon the current beliefs and expectations of Bookham's and
Avanex's management and are inherently subject to significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and generally beyond the control of Bookham and Avanex. Actual
results may differ materially from the results anticipated in these forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to, general business and economic conditions; the
performance of financial markets; the impact of the filing for bankruptcy on Nortel's ability to pay for existing products
and its demand for products in the future; the lack of availability of credit; continued demand for optical components;
changes in inventory and product mix, degradation in the exchange rate of the United States dollar relative to the
currencies of the U.K., China and Switzerland; the continued ability of Bookham to maintain requisite financial
resources; risks relating to the consummation of the contemplated merger, including the risk that required stockholder
approval might not be obtained in a timely manner or at all or that other closing conditions are not satisfied; the failure to
realize synergies and cost-savings from the transaction or delay in realization thereof; the businesses or employees of
Bookham and Avanex not be combined and integrated successfully, or such combination may take longer, be more
difficult, time-consuming or costly to accomplish than expected; and operating costs and business disruption following
the merger, including adverse effects on employee retention and on our business relationships with third parties.
Additional factors that can cause the results to materially differ than those described in the forward-looking statements
can be found in the most recent Form 10-Q, most recent Form 10-K and other periodic reports filed by Bookham and
Avanex, with the Securities and Exchange Commission. Neither Bookham nor Avanex assumes any obligation or
intends to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Legal Disclaimer
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Page 2
Additional Information And Where To Find It
This communication is being made in respect of the proposed business combination involving
Bookham and Avanex. In connection with the proposed transaction, Bookham and Avanex
plan to file documents with the SEC, including the filing by Bookham of a Registration
Statement on Form S-4 containing a Joint Proxy Statement/Prospectus, and each of
Bookham and Avanex plan to file with the SEC other documents regarding the proposed
transaction. Investors and security holders of Bookham and Avanex are urged to carefully
read the Joint Proxy Statement/Prospectus (when available) and other documents filed with
the SEC by Bookham and Avanex because they will contain important information about the
proposed transaction. Investors and security holders may obtain free copies of these
documents (when they are available) and other documents filed with the SEC at the SEC's
web site at www.sec.gov and by contacting Bookham Investor Relations at (408) 404-5400 or
Avanex Investor Relations at (510) 897-4188. Investors and security holders may obtain free
copies of the documents filed with the SEC on Bookham's website at www.bookham.com or
Avanex's website at www.avanex.com or the SEC's website at www.sec.gov. Bookham,
Avanex and their respective directors and executive officers may be deemed participants in
the solicitation of proxies with respect to the proposed transaction. Information regarding the
interests of these directors and executive officers in the proposed transaction will be included
in the Joint Proxy Statement/Prospectus described above. Additional information regarding
the directors and executive officers of Bookham is also included in Bookham's proxy
statement for its 2008 Annual Meeting of Stockholders, which was filed with the SEC on
September 18, 2008, and additional information regarding the directors and executive officers
of Avanex is also included in Avanex's proxy statement for its 2008 Annual Meeting of
Stockholders, which was filed with the SEC on October 14, 2008, respectively.
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Page 7
A Powerful New Company
&
Products
Best in class terminal and line product technologies
Best in class telecom chips in the industry based on Indium
Phosphide, Lithium Niobate and Gallium Arsenide
40Gbs and reconfigurable networks
Leverages telecom technologies for selected non-telecom
markets
Operational Strengths
Expanded customer base
Critical mass to be a leader in R&D investment
In-house and outsourced manufacturing maximizes
flexibility and drives gross margin
Financial
Expect to be Adjusted EBITDA accretive in first full quarter
Expect $7 million in quarterly synergies by the end of 4th full
quarter with less than $7 million of total restructuring costs
Expect greater cash position together than the expected
sum as two separate companies, after 12 months
Combined company has no debt
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Page 9
Transaction Summary
Company Name
New name to be announced at closing
Transaction
Stock for stock tax-free exchange; representing an equity value of
approximately $35.4 million (1)
Exchange Ratio
5.426 Bookham shares per Avanex share
Ownership
53.25% Bookham / 46.75% Avanex
Management
Alain Couder, CEO
Talented executives from both companies
Board of
Directors
Closing
Conditions
Shareholder approvals
Other customary closing conditions
Alain Couder
3 directors designated by Bookham
3 directors designated by Avanex including Giovanni Barbarossa
(1) As of January 26, 2009 closing prices.
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Gaining Critical Scale From Combination
Revenue Benchmarking
(Dollars in Millions, September Quarter Annualized, October Quarter For FNSR)
Source: Company filings and Wall Street research.
Note:
(1) Revenue for the optical communications segment only.
(2) Pro forma for the acquisition of Stratalight.
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Page 6
Legend:
Limited presence
A Market Leader
Transmission Components
Tunable lasers
Fixed lasers
Modulators
Transmission Modules
10G
40G/100G
Wavelength Management
WSS ROADM
Micro-Optics and Filters
Amplification
Modules
Components
Integrated Amplifier Solutions
Dispersion Compensation
Fixed 10G
Tunable
Subsystems (software and hardware integration)
&
Complementary Products For Metro And Long Haul Markets
Telecom Metro and Long Haul Markets
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Transmission Components
Tunable lasers
Fixed lasers
Modulators
Transmission Modules
10G
40G/100G
Wavelength Management
WSS ROADM
Micro-Optics and Filters
Amplification
Modules
Components
Integrated Amplifier
Solutions
Dispersion Compensation
Fixed 10G
Tunable
Subsystems (software and hardware integration)
Page 7
&
Creates A Competitive Platform In A Consolidating Industry
Telecom Metro and Long Haul Markets
Legend:
Limited presence
A Market Leader
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Page 17
The New Company Owns The Key Technologies
To Capture Broadband Traffic Growth
Integrated Tunable Lasers and Modulators
Size and cost advantage, enables tunable
pluggable transponders
40Gbs and 100Gbs Modulation and Signal
Impairment Mitigation Solutions
Enable wide-scale network deployment
through advanced modulation formats and
tunable dispersion compensation
High Performance Pump Lasers and Filters
Improves margin & system performance in
terrestrial and submarine amplification
'08 - '12 CAGR = 42%
High Performance Lasers and Detectors
High volume, cost effective component and
modules for 40Gbs / 10Gbs
Intelligent Sub-systems
Combines ROADM, amplification, dispersion
management with advanced software and
flexible Oasis(tm) hardware platform
Growth in Internet Bandwidth Demand
(Petabytes per month)
Source: Cisco, 2008.
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Page 19
Wide Product Portfolio To
Enable Optical Telecommunications
Provider Of Telecom Optical Solutions
LH
DWDM
LH
DWDM
Long Haul /
Submarine Network
LH
ROADM
? Add/Drop
Metro
DWDM
Ring
Metro
DWDM
Ring
SONET
Ring
SONET
Ring
Metro
DWDM
Ring
TXP
TXP
Wavelength
Management
Transmission
Modules 10/40/100G
Amplification &
Dispersion Comp.
EDFA
+ WSS
WSS
Tunable Lasers,
Receivers & Modulators
Tunable Dispersion
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Page 21
The Power Of Vertical Integration
Integrated ROADM And EDFA On A Blade
Software & Hardware
Integration
Component In-feeds for
Reduced Cost and
High Performance
Leading-edge Flexible
Module Design
980 Pump lasers
Gain Flattening Filters
EDFA module
Wavelength Switch
ROADM/EDFA On A Blade
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Page 23
Technology Innovation At 40Gbs And 100Gbps
Leveraging Chip, Component And Module Expertise
Advanced Module
Solutions for
System OEMS
High Performance
Low Power Consumption
Chips
Small Size, Low-Cost
Packaged Components
DSDBR Tunable Laser
InP MZ modulator
Tunable Dispersion Comp.
40 Gbs DQPSK transponder
40Gbs DQPSK Tunable transmitter
40Gbs DPSK/DQPSK Modulator
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Page 25
Share In Success Through Innovation
Making It Easier To Do Business For Our Customers
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Page 27
Page 27
Leading Provider Of Photonic Solutions
Photonics Tools &
Solutions (New Focus(tm))
High Power Lasers
Single Mode Single Emitters
High Power Laser Diode Bars
Multi Mode Single Emitters
Lasers & Accessories
Optomechanics
OEM Solutions
Optoelectronics
Leveraging Advanced Optical
Solutions in Non-Telecom Markets
High Power Laser Diodes for
Industrial and Defense
applications
Low power / polarized VCSEL
Lasers, high precision opto-
mechanics and module
design for semiconductor
OEMs
Leveraging Global Presence and
Low-cost Asia Manufacturing to
Market Broad Portfolio of Photonic
Tools and Solutions
Industry leading New Focus(tm)
brand and catalogue
Targeting Research and
Government customers
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Page 29
Cost-Optimized And Global Engineering Teams
Flexible And De-Risked Manufacturing Infrastructure
Fabs for Leading Chip-level Innovation
North America
Headquarters
Amplification, Dispersion Compensation,
Photonics Tools & Solutions, Filters,
and ROADM Design Centers
Europe
III-V Lasers and Modulator Fabs
10/40/100G & Transmission,
Pump Lasers and Amplifiers
Design Centers
Asia
Manufacturing Hubs
Asia Design Centers
Global Presence And Flexible 24/7 Company
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Page 15
Synergies of $7M per quarter by end of the
fourth full quarter after close
Restructuring costs of less than $7M in total
Greater cash position together after 12
months than the sum of two separate
companies
New executive team ready to work on
integration
Expected Near-Term Financial Impact
Improved gross margin from combination of
in-house and outsourced manufacturing and
product in-feeds
Supply chain savings and synergies
Combined R&D leveraging global presence
Combined sales organization
Single public company costs
Other potential synergies beyond those specifically quantified:
Leverage new opportunities quickly within expanded customer base
Product in-feeds increase with expected long term growing revenues
Sources Of Expected Efficiencies
Potential Additional Financial Impact
Financially Compelling Combination
$7M Of Quarterly Synergies
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Page 16
Target Operating Model
(1)
(1)
(1) Based on latest twelve months ended September 2008.
(2) Based on Non-GAAP operating loss that excludes amortization of intangible assets, non-cash stock and option-based
compensation, charges such as impairment and restructuring, and expenses or income from certain legal actions,
settlements and related costs, and certain other costs outside the normal course of business.
&
Latest 12 months ended September 2008
4th Full Quarter Post Close Target Long-Term Target
Gross Margin 24% 28% 31% 35%
R&D 12% 14% 12% 13%
SG&A 17% 18% 12% 12%
Non-GAAP Operating Margin (2) (5%) (2%) 7% 10%
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Page 17
Talented Leadership From Both Companies
Industrial and R&D
Telecom: Division 1
Telecom: Division 2
Sales and Administrative Leadership
Alain Couder, CEO
Jerry Turin, CFO
Jim Haynes, COO
Management
Adrian Meldrum
Richard Smart
Yves LeMaitre
Board of Directors
Bernard Couillaud (Chairman)
Alain Couder
Edward Collins
Lori Holland
Giovanni Barbarossa
Greg Dougherty
Joel Smith
Scott Parker, Sales & Marcom
Kate Rundle, General Counsel
Andy Carter, CTO
Mark Weinswig, Business Development & Planning
Kathy Zwickert, Human Resources
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Page 37
A Powerful New Company
&
Products
Best in class terminal and line product technologies
Best telecom chips in the industry based on Indium
Phosphide, Lithium Niobate and Gallium Arsenide
40Gbs and reconfigurable networks
Leverages telecom technologies for selected non-telecom
markets
Operational Strengths
Expanded customer base
Critical mass to be a leader in R&D investment
In-house and outsourced manufacturing maximizes
flexibility and drives gross margin
Financial
Expect to be Adjusted EBITDA accretive in first full quarter
Expect $7 million in quarterly synergies end of 4th full
quarter with less than $7 million of total restructuring costs
Expect greater cash position together than the expected
sum as two separate companies, after 12 months
Combined company has no debt
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Bookham Q2 FY09 Results And Q3 FY09 Outlook
Please Refer To Q2 FY09 Financial Results Release
Issued January 27, 2009
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Bookham Q2 FY09 Summary
Bookham continues to execute
December quarter Non-GAAP Gross Margin improved to 27% in
spite of $11M decrease in revenue compared with prior quarter
(GM% and revenue before impact of Nortel bankruptcy filing)
Finished December quarter with more cash than end of September
quarter
Further expanding customer base, including momentum in Japan
Significant design wins for new products, including a first production
order for our 40Gbps transponder
Strong customer satisfaction; received best supplier award from Huawei
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Together We Will Win In The Metro & Long-Haul Market
The combination of Bookham and Avanex will result in a
new technology leader for both the metro and long-haul
markets
Broader product offerings create new opportunities within
combined customer base
Financially, expect about $7M of quarterly synergies in the
4th full quarter after close, costing less than $7M in total
restructuring
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Leader In Optical Components
For Metro And Long Haul Telecom Networks
Alain Couder
CEO, Bookham
Giovanni Barbarossa
CEO, Avanex
January 27, 2009
&
|
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