Attached files
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8-K - FORM 8-K - Infinera Corp | d905437d8k.htm |
EX-99.4 - EX-99.4 - Infinera Corp | d905437dex994.htm |
EX-99.6 - EX-99.6 - Infinera Corp | d905437dex996.htm |
EX-99.1 - EX-99.1 - Infinera Corp | d905437dex991.htm |
EX-99.5 - EX-99.5 - Infinera Corp | d905437dex995.htm |
EX-99.2 - EX-99.2 - Infinera Corp | d905437dex992.htm |
EX-99.7 - EX-99.7 - Infinera Corp | d905437dex997.htm |
EX-99.8 - EX-99.8 - Infinera Corp | d905437dex998.htm |
1 |
© 2015 Infinera
Infinera To Acquire Transmode
Establishes an End-to-End Portfolio
Investor Briefing
April 2015
Exhibit 99.3 |
2 |
© 2015 Infinera
This presentation contains "forward-looking" statements that involve risks,
uncertainties and assumptions. If the risks or uncertainties ever materialize or the
assumptions prove incorrect, our results may differ materially from those expressed or
implied by such forward-looking statements. All statements other than statements of
historical fact could be deemed forward- looking, including, but not limited to, any
projections of financial information; any statements about historical results that may
suggest trends for our business; any statements of the plans, strategies, and objectives of
management for future operations; any statements of expectation or belief regarding
future events, potential markets or market size, technology developments, or
enforceability of our intellectual property rights; and any statements of assumptions
underlying any of the items mentioned. These statements are based on estimates and
information available to us at the time of this presentation and are not guarantees of
future performance. These risks and uncertainties include, but are not limited to, the risk that Transmode shareholders fail to
tender more than 90% of Transmodes outstanding shares, that any other closing conditions
are not satisfied, and that the transaction may not close; the risk that
Transmodes and Infineras businesses will not be integrated successfully; the risk that
synergies will not be realized or realized to the extent anticipated; the risk that the
combined company will not realize on its financing or operating strategies; the risk
that litigation in respect of either company or the transaction could arise; and the
risk
that disruption caused by the combined company would make it difficult to maintain certain
strategic relationships. These risks and uncertainties also include those risks and
uncertainties discussed in the offer document to be filed with the Swedish Financial
Supervisory Authority and in the Registration Statement on Form S-4 to be filed with the SEC, those risks and
uncertainties identified under the heading Risk Factors
in the Infinera Annual Report on Form 10-K for the year ended
December 27, 2014, filed with the SEC, and those risks and uncertainties identified in any
subsequent reports filed with the SEC by Infinera. Our SEC filings are available on our
website at www.infinera.com and the SECs website at www.sec.gov. We assume no obligation to, and do not
currently intend to, update any such forward-looking statements. Safe Harbor
|
3 |
© 2015 Infinera
Market Inflections
Transport Becoming Strategic
Networks
Simplifying
to
New
Model of Cloud Services and
Intelligent Transport
Vision: Enable An Infinite Pool of Intelligent Bandwidth
Poised to take off
Scalable
Optics
and
Integrated
Packet-Optical
Key
for
Simplification |
4 |
© 2015 Infinera
Multi
Market
Strategy
Horizontal
Expansion
$15.3B (2019)
Transport Market
Source: Infonetics Q4 2014 Market Forecast
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
3. Penetrate
LH Core
1. Grow
Cloud
2. Seize |
5 |
© 2015 Infinera
Building the End-to-End Portfolio
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
Cloud
LH Core
Cloud Xpress
Sliceable Photonics
DTN-X
XTC4/10
XTC4
Opportunity to Accelerate into Metro Aggregation |
6 |
© 2015 Infinera
Introducing
Transmode:
A
Leader
in
Metro
Packet-Optical
Stockholm, Sweden
NASDAQ Stockholm (TRMO)
281 employees worldwide 2014
Packet-Optical metro network solutions
650 customers, 50000+ systems deployed
History of profitability
2014: $120M Net Sales, 50.7% Gross Margin, 7.6% Operating Margin
2009-2014: 50.3% Avg. Gross Margin, 13.4% Avg. Operating Margin
#1 Packet-Optical in EMEA
Applications: Business Ethernet, Mobile fronthaul/
backhaul, Broadband Aggregation
Source: Infonetics 2014
Financials as per IFRS; 1 USD = 7.78 SEK (Dec 2014) |
7 |
© 2015 Infinera
Outstanding Strategic Fit
Source: Q4 2014 INFN: Non-GAAP, TRMO: IFRS; Infonetics 2014,
DellOro 2014 #1 Packet
Optical
EMEA
#1 100G
WDM
ex-China
Strong
NA Base
Strong
EMEA
Base
PICs
SDN
Power
Efficient
Systems
Long
Haul
Wireless
Back &
Fronthaul
Subsea
46%
Gross
Margin
52%
Gross
Margin
Metro
Core
Metro
Cloud
Metro
Access,
Edge, Core |
8 |
© 2015 Infinera
Transmodes Leadership in Metro
Lowest
Power
& Space
50000+
Systems
650+
Customers
#1
Packet
Optical
EMEA
Source: Infonetics 2014
TM-Series
10G/100G
Packet-Optical
Ethernet,
Wireless
back-
haul
/
fronthaul
TG-Series
Biz.
Service
Wireless
backhaul
CPE / PON
Biz.
Service
Wireless
backhaul
WDM
access |
9 |
© 2015 Infinera
SDN Control
Metro
Edge
Metro
Access
Metro Aggregation
Metro
Core
Cloud
LH Core
DTN-X
XTC4/10
Cloud Xpress
XTC4
Sliceable Photonics
Complementary Product Set |
10 |
© 2015 Infinera
Common
#1 100G WDM WW ex-China
Leader in ICP, NA Cable, Wholesale & Ent.
First mover in Metro Cloud for ICPs
#1 Packet-Optical EMEA
Strength in cable, wireless back/front
haul, Ethernet services
Leverage Strengths, Cross-Sell
Source: Infonetics 2014, DellOro 2014
Revenue Growth
Opportunity
Complementary Customer Base |
11 |
© 2015 Infinera
Product
Mix
Geographic
Mix
Complementary Market Offerings
2014
Metro 2%
Long-Haul
98%
Metro 100%
Americas
76%
APAC 4%
EMEA
20%
Americas
14%
APAC 4%
EMEA
82%
Combined
Entity
Metro
~18%
Americas
68%
EMEA
28%
APAC 4% |
12 |
© 2015 Infinera
Transmodes Strong Financials
5-Year Track Record (09-14)
To grow faster
than the market
Yearly sales growth higher than the
yearly growth of the global market for
Metro WDM equipment
To grow profitably
Operating margin of 12% (excluding
extraordinary items) or more over a
business cycle
Management Financial Targets
Source: Transmode FY09
FY14 IFRS Financial Statements
Revenue
CAGR
Average
Operating Margin
Average
Gross Margin
10.3%
13.4%
50.3% |
13 |
© 2015 Infinera
Expected Accretive in 2016
Synergistic Financials
Complementary customer base
Complementary product & market
End-to-End portfolio
Shared culture of deal discipline
Volume synergies
Leverage technologies across portfolio
More leveraged investments
2015E is Financial Analyst Consensus
TRMO: IFRS statements
1 USD = 7.78 SEK (Dec 2014), 8.5 SEK (Mar 2015)
TAM expansion
Revenue growth
High Gross Margins
Increased R&D Pool |
14 |
© 2015 Infinera
Benchmarking Financial Performance
Source: Public financial statements, Weighted average
for INFN+TRMO, ALU = Entire business
YoY Revenue Growth, %
2014
20
10
0
-10
50
40
30
Gross Margin, %
2014
INFN +
TRMO
Ciena
ALU
Cyan
MRV
Adva |
15 |
© 2015 Infinera
Compatible Philosophies
Play to Win
Customer First
Top-rated for Services and Support
Product Excellence
#1 100G WDM Worldwide, ex-China
#1 Packet-Optical EMEA
Profitability
Market leading Operating & Gross Margins
Culture + Talent + Business + Technology
Source: Infonetics 2014, DellOro 2014 |
16 |
© 2015 Infinera
A Transaction Good for All Stakeholders
Investors
Allows combined company to address $15.3B DWDM TAM (2019)
Combines two of the most profitable companies in the industry
Expected accretive to non-GAAP EPS in 2016; neutral to slightly dilutive 2H15
Customers
Combined company would be able to deliver an End-to-End product portfolio
Shared culture of customer first, strong technology and product excellence
Scale of combined company would allow for further investment in
technologies to allow continued differentiation
Employees
Ability to market and sell an End-to-End portfolio of products to address
customers
needs
Ability to develop compelling solutions with strong combined knowledge base
Source: Infonetics 2014 |
17 |
© 2015 Infinera
Infinera + Transmode
Full
Metro
portfolio
accelerates
100G
metro
share
End-to-End
portfolio,
$15B
market*
Complementary
customers
and
geographies
Expected
non-GAAP
EPS
accretive
in
2016
Common
philosophy
of
profitable
growth
has
led
to
strong
financial
results
Shared
culture
and
talent
driving
product
excellence
Technology
leadership
for
Packet-Optical
&
Metro
vision
acceleration
*Source: Infonetics Q4 2014 Market Forecast for 2019
|
18 |
© 2015 Infinera
Key Transaction Details
Anticipated Close
Third quarter of 2015
Closing Conditions
Tender of more than 90% of the shares of Transmode
Customary closing conditions and approvals
Transaction
Consideration
Approximately 109 SEK per share in stock and cash
o
For every 10 shares of Transmode, shareholders will receive SEK 300 in cash and
4.705 Infinera shares
o
Total of approximately 13.0 million new Infinera shares issued and $96 million in
cash
o
Transmode shareholders to own ~8.7% of combined company
Approximately $350 million total equity value
Financial Impact
Companies have highest gross margins in the industry
Cash consideration funded by Infinera balance sheet
Expected to be accretive to non-GAAP EPS in 2016; neutral to slightly dilutive
2H15 Other Terms
POD Investment AB, Transmodes largest shareholder has signed irrevocable
undertaking to support transaction and lockup agreement |
19 |
© 2015 Infinera
This communication is neither an offer to purchase nor a solicitation of an offer to sell any
shares. This communication is for informational purpose only. The exchange offer will
not be made to, nor will exchanges be accepted from, or on behalf of, holders of shares
in any jurisdiction in which the making of the exchange offer or the acceptance thereof
would not comply with the laws of that jurisdiction. The acceptance period for the
exchange offer for shares of Transmode described in this communication has not
commenced. In connection with the proposed combination of Infinera and Transmode,
Infinera will file an offer document with the Swedish Financial Supervisory Authority
and a prospectus and a Registration Statement on Form S-4 with the SEC.
Shareholders of Transmode should read the above referenced documents and materials carefully
when such documents and materials become available because they contain important
information about the transaction. Shareholders of Transmode may obtain free copies of
these documents and materials, any amendments or supplements thereto and other
documents containing important information about Infinera and the transaction, once such documents and materials
are filed or furnished, as applicable, with the SEC, through the
website maintained by the SEC at www.sec.gov. Copies of the
documents and materials filed with the SEC by Infinera will also
be available free of charge on Infineras website at
www.infinera.com
under the heading SEC Filings
in the CompanyInvestor Relations
portion of Infineras website. More
information about the exchange offer, including the formal announcement of the offer and the
offer document to be filed with and approved by the Swedish Financial Supervisory
Authority, can be found on www.infinera.se.
Disclaimer |
20 |
© 2015 Infinera
Thank You
www.infinera.com |