Infinera has announced an offer to acquire Transmode, provider of packet optical networking solutions, for approximately $350 million.
The Board of Directors of Transmode has recommended to Transmode’s shareholders to accept the offer.
Pod Investment AB has also agreed to accept the Offer with some customary conditions and is the largest shareholder of Transmode with 33 percent.
Transmode offers a range of metro core, edge and access equipment that will allow Infinera to address the entire end-to-end WDM market and to capitalize on the growth in 100G metro aggregation deployments.
This acquisition will accelerate metro packet optical strategy and establishes end to end portfolio.
Transmode’s products cover application specific features including broadband aggregation, mobile backhaul and fronthaul along with business Ethernet MEF certifications.
As per the acquition Offer, Transmode shareholders will receive SEK 300 in cash and 4.705 Infinera shares for every 10 shares of Transmode, valuing the company at SEK 109 per share.
Total equity value for Transmode of approximately $350 million.
According to the terms, Infinera will pay $96 million in cash and will issue 13 million new shares to Transmode shareholders.
Post transaction, Transmode shareholders will own 8.7 percent of the combined company.
The Offer is expected to close in the third quarter of Infinera’s fiscal year 2015.
The transaction is expected to be neutral to slightly dilutive to Infinera’s non-GAAP earnings in the second half of 2015, and accretive to Infinera’s non-GAAP earnings in 2016.
For Infinera, Morgan Stanley & Co. LLC is acting as exclusive financial adviser and Mannheimer Swartling and Wilson Sonsini Goodrich & Rosati, P.C., acts as legal advisers.
For Transmode Lazard is acting as financial adviser and Hannes Snellman, acts as legal adviser.
Last year in November, Infinera delivered one terabit per second (1 Tb/s) of transmission capacity to support the SCinet network at the International Conference for High Performance Computing, Networking, Storage and Analysis (SC14) in New Orleans.