Best Amplifiers Online Information Guide

Manufacturer of guitar amplifiers, metal guitar amplifiers, rock guitar amplifiers, and high gain guitar amplifiers.

Amplifiers, precision op amps, video amplifiers, variable gain amplifers (VGA), analog multiplexers, buffers, comparators, low voltage op amps,

Bookham Technology: Combination with Nortel Networks' Optical Transmitter and Receiver and Optical Amplifier Businesses

By Anonymous

Oxfordshire, UK: Bookham Technology plc (LSE: BHM, Nasdaq: BKHM) ("Bookham" or the "Company"), a leading provider of integrated optical components and subsystems for fibre optic communication networks, announced today that it has entered into an agreement to acquire the Optical Transmitter and Receiver and Optical Amplifier Businesses of Nortel Networks Corporation ("Nortel") (the "Combination"). As part of the Combination, Nortel Networks Limited, a subsidiary of Nortel, has also agreed to enter into a US$120.0 million (£76.5 million)* supply agreement with Bookham. The Combination is subject, inter alia, to approval by Bookham's shareholders at an Extraordinary General Meeting to be held on 5 November 2002 ("EGM").

The Company believes that the economies of scale generated by the creation of the new enlarged group will facilitate increased cost efficiencies. Furthermore, as part of an independent entity, there will be greater opportunity for the components generated from the Optical Transmitter and Receiver and Optical Amplifier Businesses to be sold to other leading systems manufacturers who may not previously have purchased components from Nortel, as Nortel is one of their competitors. Finally, by integrating the Optical Transmitter and Receiver and the Optical Amplifier Businesses' products with Bookham's own active and passive solutions, Bookham will take a significant step towards becoming a leading worldwide provider of optical components, modules and sub-systems and thus towards meeting its customers' desire to have fewer suppliers offering a broader range of products.

Bookham will acquire the assets of the Optical Transmitter and Receiver and Optical Amplifier Businesses excluding cash balances and accounts receivable, but including inventory valued at £195.7 million on a gross basis and £36.5 million on a net basis (after reserves for excess and obsolescence). Bookham has purchased these assets free from trade debtors and all other indebtedness. Substantially all of the employees of the Optical Transmitter and Receiver and Optical Amplifier Businesses will be joining Bookham as part of the Combination.

§    The consideration will be the issue to Nortel of:
o    61,000,000 new ordinary shares of Bookham ("Ordinary Shares") (which, immediately following completion of the Combination ("Completion"), would represent approximately 29.78 per cent of the issued share capital of the Company);
o    Warrants over 9,000,000 new Ordinary Shares of Bookham (the "Warrants");
o    3 - 5 year Loan Notes to the value of US$50 million (£31.9 million).

§    Bookham will also pay to Nortel on Completion US$10.0 million (£6.4 million) for restructuring expenses incurred by Nortel in connection with the Combination.

§    Nortel Networks Limited has agreed to purchase a minimum of US$120.0 million (£76.5 million) of optical components and related services from Bookham over a period of six quarters from completion of the Combination ("Completion"). In addition, over the three years following Completion, Nortel Networks Limited has agreed to purchase from Bookham agreed percentages on a product-by-product basis of its total requirements for the optical components products that are currently being supplied to Nortel by the Optical Transmitter and Receiver and Optical Amplifier Businesses, subject to certain performance criteria.

§    Based on the mid-market closing price of the Ordinary Shares of Bookham on 4 October 2002, the consideration of the Combination is valued at approximately US$111.6 million (£71.2 million), assuming full exercise of the Warrants and including the payment on Completion of US$10 million restructuring expenses incurred by Nortel in connection with the Combination but excluding the interest payable on the Loan Notes.

·    Due to the size of the Optical Transmitter and Receiver and Optical Amplifier Businesses relative to Bookham, this Combination is classified under The UK Listing Rules of the UK Listing Authority as a reverse takeover. Therefore, as required by The UK Listing Rules, Bookham has requested that listings of and dealings in its ordinary shares be temporarily suspended pending publication of the listing particulars and circular in relation to the Combination. The Company expects that this suspension will be lifted on 8 October 2002.

§    Nortel has agreed, for so long as it or any members of the Nortel Group of companies, holds five per cent or more of the issued share capital of Bookham, the holders of such Ordinary Shares will abstain, except in limited circumstances, from exercising the voting rights attached to the Ordinary Shares to ensure that Bookham is capable of carrying on its business independently of Nortel. In addition, Nortel will not have any board representation following the Combination.

§    The directors of Bookham consider the Combination and the resolutions to be proposed at the EGM to be in the best interests of the Company and its shareholders as a whole and unanimously recommend shareholders to vote in favour of the Combination at the EGM. Dr. Andrew Rickman, Chairman of Bookham, and his family, its largest shareholder, has, together with the other Directors of Bookham who together hold 29,496,878 Ordinary Shares (representing approximately 20.5 per cent of the current issued share capital of the Company) undertaken to vote in favour of the resolutions to be proposed at the EGM. In addition the company has received an irrevocable undertaking to vote in favour of the resolutions to be proposed at the EGM in respect of 12,891,000 Ordinary Shares (representing approximately 9.0 per cent of the current issued share capital of the Company).

Nortel is a leading global supplier of vertically integrated optical amplifiers, transmitters and receivers to telecom-oriented optical networking vendors. In the six months to 30 June 2002, the Optical Transmitter and Receiver and Optical Amplifier and Businesses achieved sales of £40.8 million. The Optical Transmitter and Receiver and Optical Amplifier Businesses are located principally in Paignton, UK, in Ottawa, Canada, and in Zurich, Switzerland. Substantially all of the employees of the Optical Transmitter and Receiver and Optical Amplifier Businesses will be joining Bookham as part of the Combination.

Giorgio Anania, President & Chief Executive Officer of Bookham Technology plc, commented, "We believe that the optical communications market has good long-term potential, though market conditions are currently depressed and are likely to remain depressed for the next several quarters. In this environment, having scale and technology is critical to achieving profitability in the optical components sector, as it is characterised by high fixed manufacturing costs, such as opto-electronic semiconductor fabrication facilities, and by heavy R&D investment. In particular in this environment, our customers are seeking relationships with fewer optical components suppliers who have a lower-cost position, a broader product portfolio and who can deliver next generation technologies.

"Operationally, this combination is particularly beneficial. A significant portion of the entity we are combining with is located in the UK, in close proximity to our headquarters and manufacturing operations. Nortel has always been one of our largest customers, so the working relationships are already excellent. Through the acquisition and ongoing integration of the optical components business of Marconi in February this year, we have demonstrated that we are able to integrate two substantial businesses quickly and efficiently. We believe this will also be the case in this combination.

"With this combination, we are setting ourselves clear targets for profitability to be achieved through continued focus on cost reductions, consolidation of operations and revenue growth, increased scale and the ability to sell the products of the combined company to a larger customer base."

Brian McFadden, President, Optical Networks, Nortel Networks, added,

"We are extremely pleased and excited about this transaction between Bookham and Nortel Networks. Our relationship with Bookham will enable Nortel Networks to maintain access to high performance, cost effective optical components from a world-class supplier. We see this deal as working well for all parties concerned, strengthening both companies' positions in our market place."

Morgan Stanley is acting for Bookham as financial adviser and sponsor in connection with the Combination.

The Company will announce its third quarter 2002 results on 29 October 2002 through its normal scheduled press release and conference call. The Company expects to report revenues of approximately £7.5 million, representing approximately a 6 per cent sequential increase over revenues in the second quarter, and significantly reduced cash outflow for the quarter.

* the exchange rate used throughout is £1: $1.5686

-ends-

An analyst briefing will be held at Financial Dynamics (Holborn Gate, 26 Southampton Buildings, London WC2A 1PB) at 10.00 a.m. UK time today and a conference call is scheduled for 2.30 p.m. UK time today (call in details, UK: +44 20 8240 8240, US: +1 800 513 7968).

The conference call will be available approximately one hour after the call finishes on replay number UK: +44 20 8288 4459 (pin code 204602) and US: +1 703 736 7336 (pin code 204602) and via audiocast www.bookham.com.

This announcement should be read in conjunction with the further details set out below.

Enquiries

Giorgio Anania    Bookham Technology plc    +44 20 7831 3113 today
Steve Abely                        +44 (0) 1235 837000 from 8 October 2002
Sharon Ostaszewska       
       
Andrew Bell    Morgan Stanley    +44 (0) 20 7425 8000
Clemens Buss       
       
Sarah Basden    Financial Dynamics    +44 (0) 20 7831 3113

Bookham Technology (LSE: BHM; Nasdaq: BKHM) designs, manufactures and markets integrated optical components and modules using high volume production methods. With three disruptive semiconductor technologies that offer intrinsic cost reduction: patented silicon-based ASOC, Gallium Arsenide and Indium Phosphide, the company provides end-to-end networking solutions that offer higher performance and greater systems capability to communications network system providers.

The Company, whose securities are traded on NASDAQ and the London Stock Exchange, is headquartered in the UK, with offices and manufacturing facilities in Abingdon and Caswell, in the UK, and has additional offices in US, France, Italy, Japan and China. The company employs approximately 750 people world-wide.

More information on Bookham Technology is available at www.bookham.com
Bookham and ASOC are registered trademarks of Bookham Technology plc



Statements made in this announcement include certain forward-looking statements that involve risks and uncertainties. Important factors that could cause actual results to differ from those indicated by such forward-looking statements include, among others, uncertainties relating to demand for the group's products, demand for optical components generally and overall future growth in the market for optical components, issues surrounding integration of the Optical Transmitter and Receiver and Optical Amplifier Businesses being acquired from Nortel Networks Corporation, uncertainties relating to the group's investment in, and reorganisation of, its manufacturing capacity, production equipment and personnel and related impact on profitability, quarterly variations in financial results, manufacturing capacity yields and inventory, intellectual property issues and other uncertainties that are discussed in the "Risk Factors" of the listing particulars of the Company which are to be published in connection with the Combination and which will be filed with the United Kingdom Listing Authority and the Registrar of Companies in England and Wales and which will be submitted to the Securities and Exchange Commission. Forward-looking statements represent the group's estimates as of the date made, and should not be relied upon as representing the group's estimates as of any subsequent date. While the group may elect to update forward-looking statements in the future, it disclaims any obligation to do so.

Morgan Stanley is acting exclusively for Bookham and no-one else and will not be responsible for providing to anyone other than Bookham the protections afforded to clients of Morgan Stanley or for providing advice in relation to the proposed transaction. Morgan Stanley can be contacted at 25 Cabot Square, Canary Wharf, London E14 4QA, United Kingdom.


THIS RELEASE HAS BEEN DISTRIBUTED BY WEBITPR (WWW.WEBITPR.COM)

Disclaimer:

Whilst WebitPR.com Limited endeavour to ensure the accuracy of the information contained in this Release, WebitPR.com Limited cannot accept any liability for:-

·    the inaccuracy or otherwise of any information contained in this Release; or
·    any loss liability or expense which may be suffered by any party in consequence of acting or omitting to act as a result of any information contained in or omitted from this Release.; or
·    any loss or suffering which may be caused by or to any party either as a result of the information contained in this Release or such information contained in this Release being inaccurate or otherwise misleading.

In the event that any information contained in this Release is inaccurate or misleading then please contact WebitPR.com at the above e-mail address.



This article courtesy of http://caramplifiersguide.info/.
You may freely reprint this article on your website or in
your newsletter provided this courtesy notice and the author
name and URL remain intact.

Home