By Lisa Kerner
Charlotte, N.C., May 16 - Finisar Corp. and Optium Corp. agreed to combine in an all-stock merger in a deal valued at some $212 million, the companies announced on Friday.
The agreement calls for Optium stockholders to receive 6.262 Finisar shares for each Optium share they own. Optium options and warrants will represent a corresponding right to acquire Finisar shares based on an exchange ratio, according to a joint news release.
Finisar said it expects to issue about 160 million common shares.
On Thursday, Optium (Nasdaq: OPTM) closed at $8.14 and Finisar (Nasdaq: FNSR) closed at $1.33.
The merger agreement includes a termination fee of $16.65 million payable by Finisar and a termination fee of $6.73 million payable by Optium, plus reimbursement fees up to $2.24 million, a form 8-K filing reported.
Once the merger is complete, Finisar shareholders will own 65% and Optium shareholders will own 35% of the combined company, which will trade on the Nasdaq Select Market under the symbol "FNSR."
The transaction is slated to close in the third quarter of 2008, subject to approval by Finisar and Optium shareholders.
Both companies' boards of directors have approved the deal, which is expected to result in the world's largest supplier of optical components, module and subsystems to the communications industry, it was noted in the release.
Revenues for the combined company could reach $660 million, while total annual cost synergies of $10 million to $15 million are expected, the companies said.
Finisar's board of directions will be reconstituted to include three new directors who are currently members of Optium's board, the release stated.
Jerry Rawls, Finisar chairman, president and chief executive officer, will remain as the executive chairman of Finisar's board.
Optium chairman, president and CEO Eitan Gertel will become Finisar's president and CEO. He joins Finisar's board along with Morgan Jones and Chris Crespi.
"Given the scale required to be competitive in meeting global customer needs, consolidation in the optical space is long overdue," Rawls said in the release.
Rawls added that Optium's fabless manufacturing model will allow Finisar to "more readily capture the benefits of scale, while maintaining effective resources to serve customized technology requirements."
Finisar is being advised by Oppenheimer & Co. and DLA Piper US LLP, while Morgan Stanley & Co. and Goodwin Procter LLP are advising Optium.
Sunnyvale, Calif.-based Finisar designs, manufactures and markets digital fiber-optic subsystems and network monitoring systems for high-speed data communications over local area networks.
Optium designs and manufactures optical subsystems for use in telecommunications and cable TV network systems. The company is located in Horsham, Pa.
| Acquirer: | Finisar Corp.
|
| Target: | Optium Corp.
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| Announcement date: | May 16
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| Transaction total: | $212 million
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| Termination fees: | $16.65 million payable by Finisar; $6.73 million payable by Optium
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| Price per share: | 6.262 Finisar shares
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| Expected closing: | Third quarter of 2008
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| Stock price for acquirer: | Nasdaq: FNSR: $1.33 on May 15
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| Stock price of target: | Nasdaq: OPTM: $8.14 on May 15
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