Finisar will use Ignis’ laser in its Gbps tunable 300-pin and tunable XFP product lines. It estimates that the combined worldwide market for these products will be approximately USD $250 million in calendar 2011 and will grow to approximately USD $400 million in 2015.

Finisar Corporation and Ignis have entered into a transaction agreement under which Finisar will make a recommended voluntary public cash offer to acquire all of the outstanding shares of Ignis not currently owned by Finisar.

Finisar will purchase for NOK 8 per share (~ $USD 1.43), or an aggregate purchase price of up to approximately USD $76 million.

On March 21 and 22, 2011, Finisar acquired an aggregate of 18.3 million Ignis shares from certain existing Ignis shareholders, for NOK 8 per share in cash, or an aggregate purchase price of USD $26 million. These purchases bring Finisar's total ownership to approximately 25.7 million shares (approximately 32.6% of the outstanding Ignis shares on a fully-diluted basis).

"Ignis has developed many innovative new technologies and currently offers multiple industry leading products that are focused on attractive growth markets," said Eitan Gertel, Chief Executive Officer of Finisar.

"This acquisition represents an extension of our vertical integration strategy. Ignis has developed, amongst other of its product technologies, a tunable laser that is integrated with a modulator and a semiconductor optical amplifier and that Finisar believes has the highest performance currently available in the market. The Ignis tunable laser will be used in Finisar's industry leading 10 Gbps tunable 300-pin and tunable XFP product lines. Finisar estimates that the combined worldwide market for these products will be approximately USD $250 million in calendar 2011 and will grow to approximately USD $400 million in 2015."

"This acquisition will also enable us to offer our customers a number of new 40/100 Gbps products based on advanced optical device integration technologies from Ignis' various business units. We are very excited about this acquisition and look forward to working with the Ignis employees to grow our combined business."

"Our unique technologies and innovative solutions are the base of the product platform we offer to a wide range of markets and customers around the world. We have developed a strong collaborative relationship with Finisar and its employees over the years and believe that our two companies share a common culture focused on innovation and serving the needs of our customers. Finisar represents a strong strategic fit for Ignis," said Thomas Ramm, Chief Executive Officer of Ignis.

The offer price represents a premium of 58.4% over the closing share price of Ignis on March 21, 2011, the last trading day prior to Finisar's public announcement of its intention to make the offer, and a premium of 61.5% over the adjusted volume weighted average market price for the three month period preceding the announcement.

Certain Ignis shareholders, including all members of its management and board owning shares, have committed to accept the offer subject to certain conditions. The shares which have been committed on these terms represent approximately 19.7% of the outstanding shares of Ignis on a fully-diluted basis and, together with the shares currently owned by Finisar, would total approximately 52.3% of the outstanding shares of Ignis on a fully-diluted basis.

USD $14 million of the consideration to be paid to certain of these shareholders will be subject to an escrow arrangement related to Ignis' acquisition of SmartOptics Holdings AS in December 2010 and will be released to the former SmartOptics shareholders only upon the achievement of certain financial and other milestones related to the ongoing operations of the SmartOptics business.

Finisar has been informed by Ignis that another party has recently made an offer to acquire Ignis and that, after considering both offers, the board of directors of Ignis has adopted a resolution to recommend Finisar's offer to its shareholders.

An offer document setting forth in detail the terms of Finisar's offer will be published and distributed to all Ignis shareholders as soon as practicable following review and approval by the Oslo Stock Exchange, which is expected to be obtained in late March or early April. The Ignis board will issue a formal statement regarding Finisar's offer as soon as the offer document is available.

The completion of the offer will be subject to the satisfaction or waiver by Finisar of customary conditions, including acceptance of the offer by the holders of at least 67% of the outstanding Ignis shares on a fully-diluted basis. The transaction is not currently expected to require approval by competition or antitrust authorities in any jurisdiction. The offer will not be subject to any financing conditions and will be funded from Finisar's existing cash resources. Subject to the various closing conditions, the offer and resulting purchases are expected to close early in Finisar's first fiscal quarter ending July 31, 2011.

Ignis reported revenues of approximately $USD 12.2 million for its quarter ended December 31, 2010, or USD$15.8 million on a pro forma basis, including the operations of SmartOptics, which was acquired in December 2010.

Finisar expects the acquisition to be dilutive to its non-GAAP earnings per share by approximately $0.02 per share in its first fiscal quarter ending July 31, 2011 but, subject to the achievement of anticipated synergies, to be accretive within one year following the closing.

Ignis has entered into a transaction agreement with Finisar which, among other things, specifies the offer process, imposes restrictions on certain actions by Ignis outside the ordinary course of business, and contains customary non-solicitation provisions. The transaction agreement also provides that the board of directors of Ignis may withdraw its recommendation only if it receives a competing offer that the board considers to be more favorable to Ignis's shareholders than Finisar's offer. Under certain circumstances, including the withdrawal of the board's recommendation and the subsequent lapse of Finisar's offer, Ignis would be required to pay a break-up fee of USD $1.5 million to Finisar.

In connection with the transaction agreement, Finisar has agreed to provide Ignis with a bridge financing facility under which Ignis may borrow up to USD $3 million after April 15, 2011 for working capital purposes. Loans under the facility will bear interest at the rate of 5% per annum, will be secured by certain assets of Ignis and will be payable on December 31, 2011.

SEB Enskilda is acting as Finisar's financial advisor in the transaction and as the receiving agent for the offer, and DLA Piper is acting as Finisar's legal advisor in the transaction.

First Securities AS is acting as financial advisor to Ignis's Board of Directors, and Wiersholm is acting as Ignis's legal advisor in the transaction.