logo
Plus   Neg
Share
Email

Infinera To Acquire Coriant

Infinera (INFN), provider of Intelligent Transport Networks, said that it plans to acquire Coriant, a privately held global supplier of open, hyperscale network solutions.

The acquisition is expected to be substantially accretive in 2019. This accretion will come from $100 million of identified cost savings in both cost of goods sold and operating expenses. Total cost synergies of $250 million are expected through 2021, with the continuation of operating synergies and the introduction of vertical integration into the Coriant product line, resulting in a step-function increase in Coriant's margins.

As per the terms of the definitive purchase agreement governing the acquisition, subject to customary adjustments, Infinera will pay approximately $150 million in cash at closing, and estimated additional amounts of $25 million in the two quarters post-closing and $55 million over a period of years.

Infinera said it will issue approximately 21 million shares, which when combined with the cash consideration, results in total transaction consideration of approximately $430 million.

Confident in the combined company's opportunities, Coriant's majority owner, Oaktree Capital Management, expressed an interest in being compensated for this transaction largely in stock. Post-transaction, Oaktree will own approximately 12 percent of the combined company on a fully diluted basis. Pursuant to the terms of the definitive purchase agreement, Oaktree has agreed to lock up 50 percent of its shares for six months post-close and the remaining 50 percent of its shares for 12 months post-close.

To fund the cash requirements of this transaction, and to support future working capital requirements, Infinera plans to pursue debt financing.

The acquisition is expected to close in the third quarter of 2018, subject to customary closing conditions. The board of directors of Infinera has unanimously approved the transaction.

Infinera said it will provide its second quarter results and commentary on its Q2 earnings call on August 7, 2018. :

Revenue is expected to be slightly higher than the midpoint of our previously reported guidance range. GAAP gross margin and non-GAAP gross margin are expected be at the high end of our previously reported guidance ranges; GAAP operating expenses and non-GAAP operating expenses are expected to be in line with the midpoint of our previously reported guidance ranges; GAAP operating margin and non-GAAP operating margin are expected to exceed previously reported guidance estimates.

For comments and feedback contact: editorial@rttnews.com

Business News

Editors Pick
SiriusXM launched a new subscription package exclusively for college students at a steep discount, just ahead of the fall semester. The satellite-radio giant introduced the "Student Premier" Package that provides students with all the content in SiriusXM's "Premier Streaming" package for $4 per month. This is a 69 percent discount from the regular price of $12.99 per month for Premier Streaming. Apple Inc. warned that its newly launched titanium Apple Card can be easily damaged if not stored properly. The company advised that the card must be kept away from fabrics like leather and denim as they can cause permanent discoloration. The tech giant has posted a support page that provides instructions to users on how to protect and maintain their Apple Card. Southwire Co. LLC recalled about 3000 units of Garvin pop-up electrical outlet floor box kits for concerns of fire hazard. The company said the electrical receptacles can overheat when in use. Southwire already received three reports of the floor boxes overheating. However, there have been no injuries reported so far.
Follow RTT