Opnext, Inc. ("Opnext" or the "Company") (NASDAQ:OPXT), a global
leader in the design and manufacture of optical modules and
components, announced today that it has reached an understanding to
settle the previously disclosed class action lawsuit in California
captioned Martin Zilberberg v. Charles J. Abbe, No. RG12623460 (and
the cases consolidated with the Zilberberg action, other than the
Wright action, which was voluntarily dismissed on July 5, 2012) and
the previously disclosed class action lawsuit in Delaware captioned
In re Opnext, Inc. Shareholders Litigation, C.A. No. 7400-VCL,
respectively (collectively, the "Merger Litigation"). The Merger
Litigation relates to the Agreement and Plan of Merger, dated as of
March 26, 2012, by and among Oclaro, Inc., a Delaware corporation
(“Oclaro”), Tahoe Acquisition Sub, Inc., a Delaware corporation and
a wholly owned subsidiary of Oclaro, and Opnext.
The Company agreed to the settlement solely to avoid the costs,
risks and uncertainties inherent in litigation, and without
admitting any liability or wrongdoing. The other defendants and all
named plaintiffs in the Merger Litigation are parties to the
settlement, which provides, among other things, that the parties
will seek to enter into a stipulation of settlement which provides
for the conditional certification of the Zilberberg Action as a non
opt-out class action pursuant to California Code of Civil Procedure
§ 382 and California Rule of Court 3.769 on behalf of a class
consisting of all record and beneficial owners of Opnext common
stock during the period beginning on March 26, 2012, through the
date of the consummation of the proposed merger, including any and
all of their respective successors in interest, predecessors,
representatives, and the release of all asserted claims. The
asserted claims will not be released until such stipulation of
settlement is approved by the California court. There can be no
assurance that the parties will ultimately enter into a stipulation
of settlement or that the California and Delaware courts will
approve such settlement even if the parties were to enter into such
stipulation. The settlement will not affect the merger
consideration to be received by Opnext stockholders or the timing
of the special meeting of Opnext stockholders scheduled for July
17, 2012.
Additionally, as part of the settlement, Opnext has agreed to
make certain additional disclosures related to the proposed merger,
which are set forth below. The additional disclosures supplement
the disclosure contained in the joint proxy statement/prospectus
which forms a part of the Registration Statement on Form S-4 filed
by Oclaro with the Securities and Exchange Commission ("SEC") on
June 13, 2012 and mailed to Opnext's stockholders on or about June
15, 2012 (the "Proxy Statement"), and should be read in conjunction
with the disclosures contained in the Proxy Statement, which in
turn should be read in its entirety. Nothing in this press release
or any stipulation of settlement shall be deemed an admission of
the legal necessity or materiality of any of the disclosures set
forth herein. Capitalized terms used herein, but not otherwise
defined, shall have the meanings ascribed to such terms in the
Proxy Statement.
The following additional disclosures supplement the existing
disclosures contained under the caption "Background" beginning on
page 40 of the Proxy Statement:
On March 18, 2012, a representative of Blackstone received an
unsolicited phone call from a representative of a
technology-focused private equity firm that subsequently made an
unsolicited, non-binding written offer on May 23, 2012 to acquire
all of the issued and outstanding capital stock of Opnext for $1.40
per share in cash. That private equity firm indicated in the March
18 call that it had heard rumors that Opnext was in merger
discussions with another party in the industry, and on that basis
wanted to express its interest in a transaction with Opnext,
including potentially combining Opnext with one of its portfolio
companies. The private equity firm did not propose any specific
transaction structure or price terms during this call. The
representative of Blackstone promptly informed senior management of
Opnext of the call. Senior management gave due consideration to the
March 18 call received from the private equity firm but determined
to not pursue the inquiry in light of the advanced stage of the
discussions with Oclaro and the potential that any pursuit of the
inquiry could have the effect of delaying or ending the discussions
with Oclaro, the lack of specificity relating to the structure and
form of consideration in any transaction with the private equity
firm and the fact that the board of directors of Opnext had
generally considered and deemed undesirable certain transaction
structures similar to those that could potentially arise from
further discussions with the private equity firm.
On March 19, 2012, Mr. Ryuichi Otsuki, a director of Opnext and
Executive General Manager, Global Business Planning &
Operations Division, Information & Telecommunication Systems
Company of Hitachi, Ltd., indicated to Mr. Bosco that, as
previously discussed, Hitachi would support the proposed merger
with Oclaro, but that notwithstanding such support Mr. Otsuki would
step down from the Opnext board of directors upon completion of the
merger and no representative of Hitachi would sit on the combined
company board due to certain Hitachi accounting considerations.
In addition, the entry for May 17, 2011 under the caption
“Background” is supplemented by replacing the first sentence
with:
“On May 17, 2011, the board of directors of Opnext held a
regularly scheduled meeting, at which time the board of directors
formed a strategic advisory committee comprised of Messrs. Cowan,
Abbe, Phillip Otto and John Otto, and instructed the management of
Opnext to conduct a valuation of Opnext based upon its current
stand-alone business plan as well as a comprehensive review of
Opnext’s potential strategic options.”
In addition, the entry for September 26, 2011 under the caption
“Background” is supplemented by adding the following language at
the conclusion of the sentence beginning with “Opnext’s senior
management…”:
“due to conservative views about the time to reach break-even
and concerns around managing downsizing in Japan.”
The following additional disclosures supplement the existing
disclosures contained under the caption "Opinion of Opnext’s
Financial Advisor—Valuation of Opnext—Selected Companies Analysis"
beginning on page 67 of the Proxy Statement:
Company
2012EFV/Revenue
2013EFV/Revenue
2012E FV/Adj.EBITDA
2013E FV/Adj.EBITDA
EMCORE Corp. 0.49x 0.38x
n/m1
n/m Finisar Corp. 1.45x 1.31x 9.5x 7.0x Oclaro, Inc. 0.45x 0.38x
n/m 12.8x
OplinkCommunicationsInc.
0.77x n/m 5.7x n/m Opnext, Inc. 0.17x 0.15x n/m 3.8x
NeoPhotonicsCorp.
0.34x 0.29x n/m 8.2x
Note: Trading data as of 3/22/2012
The following additional disclosures supplement the existing
disclosures contained under the caption "Opinion of Opnext’s
Financial Advisor—Valuation of Opnext—Selected Precedent
Transactions Analysis" beginning on page 69 of the Proxy
Statement:
Acquiror Target Date Announced
Transaction Firm Value /LTM
Revenue Multiple
Eurazeo 3S Photonics SAS October 2011 0.83x
NeoPhotonicsCorporation
Santur Corporation September 2011 0.93x Francisco Partners Source
Photonics Inc. October 2010 0.70x Ignis ASA SmartOptics AS
September 2010 1.42x Oclaro Inc. Mintera Corporation July 2010
0.61x Bookham Inc. Avanex Corporation January 2009 0.25x
1 n/m represents multiples that were not meaningful due to
unavailability of analyst forecasts or negative EBITDA
Additional Information and Where to Find It
This communication is being made in respect of the proposed
business combination involving Opnext and Oclaro. In connection
with the proposed transaction, each of Opnext and Oclaro has mailed
the Proxy Statement to its stockholders, and each of Opnext and
Oclaro may file other documents with the SEC regarding the proposed
transaction. Investors and security holders of Opnext and Oclaro
are urged to carefully read the Proxy Statement and other documents
filed with the SEC by Opnext and Oclaro as they will contain
important information about the proposed transaction. Investors and
security holders may obtain free copies of the documents filed with
the SEC on Opnext’s website at www.opnext.com or Oclaro’s website
at www.oclaro.com or the SEC’s website at www.sec.gov. Opnext,
Oclaro and their respective directors and executive officers may be
deemed participants in the solicitation of proxies with respect to
the proposed transaction. Information regarding the interests of
these directors and executive officers in the proposed transaction
is included in the Proxy Statement. Additional information
regarding the directors and executive officers of Opnext is also
included in Opnext’s Form 10-K for the fiscal year ended March 31,
2012, which was filed with the SEC on June 8, 2012.
Cautionary Statement Regarding Forward-Looking
Statements
Certain of the statements in this release are “forward-looking
statements” within the meaning of the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995 that are not
limited to historical facts, but reflect Opnext’s and Oclaro’s
current beliefs, expectations or intentions regarding future
events. Words such as “may,” “will,” “could,” “should,” “expect,”
“plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,”
“predict,” “potential,” “pursue,” “target,” “continue,” and similar
expressions are intended to identify such forward-looking
statements. These forward-looking statements include, without
limitation, Opnext’s and Oclaro’s expectations with respect to the
anticipated financial benefits of the proposed transaction;
approval of the proposed transaction by stockholders; the
satisfaction of the closing conditions to the proposed transaction;
and the timing of the completion of the proposed transaction. All
forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements, many of which are
generally outside the control of Opnext and Oclaro and are
difficult to predict. Examples of such risks and uncertainties
include, but are not limited to: (i) the failure of the merger to
close for any reason; (ii) the competitive position and
opportunities for the combined company; (iii) general business and
economic conditions; (iv) the performance of financial markets; (v)
risks relating to the consummation of the contemplated merger,
including the risk that required stockholder approval and
regulatory agencies might not be obtained in a timely manner or at
all or that other closing conditions are not satisfied; (vi) the
impact on the merger on the markets for the combined companies
optical, industrial and consumer products; (vii) the failure of the
combined company to realize synergies and cost-savings from the
transaction or delay in realization thereof; (viii) the businesses
or employees of Opnext and Oclaro not being combined and integrated
successfully, or such combination taking longer or being more
difficult, time-consuming or costly to accomplish than expected;
(ix) operating costs and business disruption following the merger,
including adverse effects on employee retention and on our business
relationships with third parties; (x) the future performance of the
combined company following the closing of the merger; (xi) the
combined company’s ability to maintain gross margins; (xii) effects
of fluctuating product mix on results; (xiii) the combined
company’s ability to timely develop and commercialize new products;
(xiv) the combined company’s ability to respond to evolving
technologies and customer requirements; (xv) the combined company’s
dependence on a limited number of customers for a significant
percentage of its projected revenues; (xvi) the combined company’s
ability to effectively compete with companies that have greater
name recognition, broader customer relationships and substantially
greater financial, technical and marketing resources; (xvii)
increased costs related to downsizing and compliance with
regulatory requirements in connection with such downsizing,
competition and pricing pressure; (xviii) the combined company’s
potential lack of availability of credit or opportunity for equity
based financing; (xix) the combined company’s risks associated with
international operations; (xx) the combined company’s outcome of
tax audits or similar proceedings; (xxi) the outcome of litigation
pending against Opnext or Oclaro; and (xxii) the parties’ ability
to successfully negotiate an final settlement agreement, or the
Delaware and California courts’ approval of such a settlement.
Additional factors that can cause the results to materially differ
than those described in the forward-looking statements can be found
in the most recent Form 10-Q, most recent Form 10-K and other
periodic reports filed by Opnext and Oclaro with the SEC. They each
anticipate subsequent events and developments may cause their views
and expectations to change. Neither Opnext nor Oclaro assumes any
obligation, and they specifically disclaim any intention or
obligation, to update any forward-looking statements, whether as a
result of new information, future events or otherwise.
(OPXT-G)
About Opnext:
Opnext (NASDAQ:OPXT) is the optical technology partner of choice
supplying systems providers and OEMs worldwide with one of the
industry’s largest portfolio of 10Gbps and higher next generation
optical products and solutions. The Company’s industry expertise,
future-focused thinking and commitment to research and development
combine in bringing to market the most advanced technology to the
communications, defense, security and biomedical industries. Formed
out of Hitachi, Opnext has built on more than 30 years of
experience in advanced technology to establish its broad portfolio
of solutions and solid reputation for excellence in service and
delivering value to its customers. For additional information,
visit www.opnext.com.
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