Proposed Acquisition of the Optical Components Business of Marconi plc
London. The Board of Bookham Technology plc ("Bookham") today announces that it has entered into an agreement to acquire the business of Marconi Optical Components Limited ("MOC") (the "Acquisition"), a wholly owned subsidiary of Marconi plc, in exchange for 12,891,000 ordinary shares in Bookham, equivalent to approximately 9.999 per cent. of the current issued share capital of Bookham. Based on the mid-market closing share price of Bookham on 14 December 2001 the Acquisition has a value of approximately 19.7 million pounds sterling. The Acquisition is conditional upon the approval of Bookham shareholders.
MOC designs, manufactures and supplies current and next generation active optical components. Based in Caswell, Northamptonshire (UK), MOC s products include fixed and tunable lasers, high speed gallium arsenide modulators, transmitters, receivers and erbium doped fibre amplifiers ("EDFAs").
By integrating MOC s active components with its own solutions, Bookham expects to accelerate its development of more highly integrated optical components combining both active and passive optical functions, providing greater subsystems capability to its customers and resulting in margin and efficiency improvements.
As part of the Acquisition Marconi has agreed to purchase a minimum of 30 million pounds of components from Bookham to meet the needs of its core business operations over the next eighteen months (subject to certain performance and capacity terms).
Commenting on the Acquisition, Giorgio Anania, President and CEO of Bookham, said: We believe that the acquisition is an important step for Bookham towards our goal of becoming the leading global provider of integrated optical circuits and subsystems to the optical network systems manufacturers. We anticipate our customers in the future will require more highly integrated subsystems incorporating both active and passive optical functionality. Combining Bookham s integrated silicon optical chip with MOC s active optical components, we believe, will allow us to provide these fuller solutions. The acquisition provides Bookham with both immediate revenues from the Marconi supply agreement and longer term growth potential from the development of next generation capabilities.
Dr. Andrew Rickman, Chairman of Bookham, has announced his full support for the Acquisition.
There is an analyst briefing at Lehman Brothers (1 Broadgate, London EC2M 7HA) at 10.00 a.m. UK time today and there is a conference call at 3.00 p.m. UK time today (call in details, UK: +44-20-8781-0596, US: 001-800-521-5414).
This press release should be read in conjunction with the further details set out below.
Lehman Brothers Europe Limited, which is regulated in the UK by The Financial Services Authority, is acting for Bookham in connection with the Acquisition and no one else and will not be responsible to anyone other than Bookham for providing the protections afforded to customers of Lehman Brothers, nor for providing advice in relation to the Acquisition and any other matters described herein.
The ordinary shares to be issued in conjunction with the Acquisition ( New Ordinary Shares ) have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act ), or applicable state securities laws in the United States, and may not be offered or sold within the United States absent registration or an exemption therefrom. Bookham does not intend to register the New Ordinary Shares outside the United Kingdom.
This press release is not an offer to sell, or a solicitation of an offer to buy, any ordinary shares of Bookham. The New Ordinary Shares are being offered to Marconi Optical Components Limited in reliance on Regulation S under the Securities Act.
Statements made in this press release that are not historical facts include 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, recovery of industry demand, the need to manage manufacturing capacity, production equipment and personnel to anticipated levels of demand for products, possible disruption in commercial activities caused by terrorist activities or armed conflicts, the related impact on margins, acceptance of Bookham s ASOC product line, reductions in demand for optical components, expansion of Bookham s business operations, quarterly variations in results, manufacturing capacity yields and inventory, intellectual property issues and other uncertainties that are discussed in the Risk Factors section of Bookham s Annual Report on Form 20-F dated May 25, 2001 which is on file with the Securities and Exchange Commission. Forward-looking statements represent Bookham s estimates as of today, and should not be relied upon as representing Bookham s estimates as of any subsequent date. While Bookham may elect to update forward-looking statements in the future, it disclaims any obligation to do so.
Further Details
The Board of Bookham Technology plc (Nasdaq: BKHM - news; LSE: BHM) ( Bookham ) today announces that it has entered into an agreement to acquire the business of Marconi Optical Components Limited (``MOC ) (the Acquisition ), a wholly owned subsidiary of Marconi plc, in exchange for 12,891,000 ordinary shares in Bookham (``New Ordinary Shares ), equivalent to approximately 9.999 per cent. of the current issued share capital of Bookham.
Based on the mid-market closing share price of Bookham on 14 December 2001 the Acquisition has a value of approximately 19.7m pounds. The Acquisition is conditional upon the approval of Bookham shareholders at an extraordinary general meeting. A circular convening an extraordinary general meeting will be sent to Bookham shareholders in due course. The board of directors of Bookham (the ``Board ) expects the Acquisition to be completed in the first quarter of 2002.
Information on MOC
MOC designs, manufactures and supplies current and next generation active optical components. Based in Caswell, Northamptonshire (UK), MOC s products include fixed and tunable lasers, high speed gallium arsenide modulators, transmitters, receivers and erbium doped fibre amplifiers (``EDFAs ). MOC has over twenty-five years of advanced research and development in the area of optical technologies, compound semiconductor materials and semiconductor manufacturing processes.
Based upon unaudited data, for the year ended 31 March 2001, MOC (aggregated with the results of the optical amplifiers business of Marconi plc which it acquired on 1 April 2001) recorded a loss before tax of 18.7 million pounds on turnover of 11.1 million pounds. The majority of such turnover was derived from companies outside the Marconi plc group, including global equipment providers. As at 31 March 2001, the unaudited net book value of the fixed assets and inventory of the business was 38.7 million pounds.
Information on Bookham
Bookham designs, manufactures and markets components that integrate optical processing functions onto a single silicon chip using high volume production methods. Using patented silicon-based technology known as ASOC , Bookham s products generate, detect, route and control light signals, allowing communications network providers to build systems with advanced optical processing capabilities. Bookham, whose securities are traded on the NASDAQ and the London Stock Exchange, is headquartered in Abingdon, Oxfordshire (UK), with facilities in the US, Canada, France, Italy and Japan, and employed approximately 640 people worldwide as at 30 September 2001.
Background to and Benefits of the Acquisition
Bookham s goal is to become the leading global provider of integrated optical circuits and subsystems to optical network systems manufacturers. Bookham believes that the Acquisition is an important step in the achievement of its goal.
Extending Bookham s integrated product line to meet the industry s evolving needs
Optical network systems manufacturers are increasingly demanding complete modular solutions, rather than discrete components. In order to fulfill customer requirements, suppliers need to be able to deliver increasingly compact solutions offering higher performance, lower costs and greater functionality in an integrated package of active and passive subsystems. Bookham is a technological leader in integration of multi-function optical capability on a single silicon optical chip. MOC is a leader in advanced active components. By integrating MOC s active components with its own solutions, Bookham expects to accelerate its development of more highly integrated optical components combining both active and passive optical functions, providing greater subsystems capability to its customers and resulting in margin and efficiency improvements.
Broaden research and development
MOC has over twenty-five years of advanced research and development in the area of optical technologies, compound semiconductor materials and semiconductor manufacturing processes. Over this period MOC has built a strong active components design team, volume manufacturing capacity and research and development facilities in Caswell. MOC has a significant intellectual property portfolio including lasers, high speed modulators, optical amplifiers and general micro optics and processes.
Adding to top-line growth
As part of the Acquisition Marconi has agreed to purchase a minimum of 30 million pounds of components from Bookham to meet the needs of its core business operations over the next eighteen months (subject to certain performance and capacity terms).
Efficiency of cost structure
The economies of scale generated by the combination of the two businesses, including research and development, manufacturing, capital expenditure and sales, general and administration, will facilitate increased cost efficiencies.
Enhanced potential for developing custom, fully modular solutions
Bookham believes that the diversified and enhanced product line following the Acquisition will facilitate its future participation in design-in solutions, whereby Bookham works with its customers to tailor products to their precise requirements.
Terms and Financing of the Acquisition
The consideration payable is 12,891,000 ordinary shares in Bookham equivalent to approximately 9.999 per cent. of the current issued share capital of Bookham. Based on the mid-market closing share price of Bookham on 14 December 2001 the consideration represents a value of approximately 19.7 million pounds. Marconi has agreed to limitations on resale for the New Ordinary Shares that will minimise disruption to the trading of Bookham shares.
As at 30 September 2001, Bookham had a cash balance of 199.7 million pounds. Bookham has successfully reduced cash spend per quarter from 29.6 million pounds in the three month period to 31 December 2000 to 15.5 million pounds in the three month period to 30 September 2001.
The Acquisition is subject to certain conditions including approval by Bookham s shareholders, admission of the New Ordinary Shares to the Official List of the UK Listing Authority and admission to trading of the New Ordinary Shares on the London Stock Exchange. A circular convening an extraordinary general meeting will be sent to Bookham shareholders in due course. The Board expects the Acquisition to be completed in the first quarter of 2002.
There is an analyst briefing at Lehman Brothers (1 Broadgate, London EC2M 7HA) at 10.00 a.m. UK time today and there is a conference call at 3.00 p.m. UK time today (call in details, UK: +44-20-8781-0596, US: 001-800-521-5414).
Lehman Brothers Europe Limited, which is regulated in the UK by The Financial Services Authority, is acting for Bookham in connection with the Acquisition and no one else and will not be responsible to anyone other than Bookham for providing the protections afforded to customers of Lehman Brothers, nor for providing advice in relation to the Acquisition and any other matters described herein.
The New Ordinary Shares have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the Securities Act ), or applicable state securities laws in the United States, and may not be offered or sold within the United States absent registration or an exemption therefrom. Bookham does not intend to register the New Ordinary Shares outside the United Kingdom.
This press release is not an offer to sell, or a solicitation of an offer to buy, any ordinary shares of Bookham. The New Ordinary Shares are being offered to Marconi Optical Components Limited in reliance on Regulation S under the Securities Act.
Statements made in this press release that are not historical facts include 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, recovery of industry demand, the need to manage manufacturing capacity, production equipment and personnel to anticipated levels of demand for products, possible disruption in commercial activities caused by terrorist activities or armed conflicts, the related impact on margins, acceptance of Bookham s ASOC product line, reductions in demand for optical components, expansion of Bookham s business operations, quarterly variations in results, manufacturing capacity yields and inventory, intellectual property issues and other uncertainties that are discussed in the Risk Factors section of Bookham s Annual Report on Form 20-F dated May 25, 2001 which is on file with the Securities and Exchange Commission. Forward-looking statements represent Bookham s estimates as of today, and should not be relied upon as representing Bookham s estimates as of any subsequent date. While Bookham may elect to update forward-looking statements in the future, it disclaims any obligation to do so.
SOURCE: Bookham Technology plc
