Filed by Bookham Technology plc
pursuant to Rule 425 under the Securities Act of 1933
Subject Company: New Focus, Inc.
Commission File No.: 000-29811
This filing relates to a proposed merger (the Merger) between Bookham Technology plc (Bookham) and New Focus, Inc. (New Focus) pursuant to the terms of an Agreement and Plan of Merger, dated as of September 21, 2003 (the Merger Agreement), by and among Bookham, Budapest Acquisition Corp. and New Focus
On September 22, 2003, Bookham posted the following slide presentation regarding the Merger to its website.
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Link to searchable text of slide shown above
Searchable text section of graphics shown above
Thinking optical solutions
UK
Investor Presentation
September 2003
1
Disclaimer
Any remarks that we may make about future expectations, plans and prospects for Bookham constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, Including those discussed in our Annual Report on Form 20-F for the year ended December 31, 2002, as amended, which is on file with the Securities and Exchange Commission. Forward-looking statements represent Bookhams estimates as of the date made, and should not be relied upon as representing Bookhams 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.
www.bookham.com |
|
Thinking optical solutions |
2
Proposed acquisition of New Focus by Bookham - transaction highlights
All-share acquisition of New Focus by Bookham
Bookham would acquire New Focus for £118 million ($191 million) in stock
84 million shares, including assumed exercise of options (fixed 1.2015 exchange ratio)
Fixed net cash distribution of approximately £86 million ($140 million) to New Focus stockholders
27.4% pro forma ownership for current stockholders of New Focus
Acquisition would give Bookham:
$25 million per year non-telecom optical components/RF business
New Focus business which is progressing towards breakeven with improving margins and revenue growth prospects
£65 million ($105 million) of cash on closing balance sheet
Low-cost China manufacturing facility
Transaction expected to accelerate development of non telecom optical business and reduce dependency on major telecom customers
Non-telecom revenues in 2004 expected to be approximately 30% of total Bookham revenues
Estimated closing date December 2003
3
Strategic rationale of proposed transaction
Expect to:
Provide substantial increase in cash reserves
Accelerate development of non-telecom optical business
Reduce dependency on major telecom customers
Provide additional low cost manufacturing capability through state-of-the-art Chinese facility
Establish strong Bookham presence in Silicon Valley
Accelerate time to operating cash breakeven
4
Expected benefits to New Focus
Positive shareholder return
Tax efficient cash distribution of approximately $140 million
Approximately 84 million Bookham ordinary shares, £118 million ($191 million) based on London Stock Exchange close on September 19, 2003
$4.91 per share, 18% premium on NUFO close on September 19, 2003
Balanced mix of cash distribution and significant equity position in Bookham
Positive outcome for New Focus business and employees
Strong product fit
Synergies in distribution channels and component infeeds
Continue to grow New Focus product portfolio
On-going relationship with Bookham
Board representation
Involvement integrating New Focus with Bookham
5
Expected to accelerate development of non-telecom optical business
Q2 2003
[CHART]
Bookham
[CHART]
Bookham Pro forma
New Focus is a leading provider of Photonics and Microwave Solutions to diversified markets
New Focus has a strong reputation for innovation, quality and customer service
New Focus has over 100 patents and applications and 20 industry awards for innovation
New Focus served markets are estimated at $1 billion in 2003 (1)
Acquisition is consistent with previously announced non-telecom diversification strategy
(1) Source: Laser Focus World, Berenberg Bank, Medical Report, and Strategies Unlimited
In 2004, expect approximately 30% of revenues from non-telecom customers
6
|
1990 |
Founded around a mission to provide innovative photonics tools |
|
|
|
|
1991 |
Achieved initial revenues with the introduction of high-speed detectors, electro-optic modulators, and opto-mechanics |
|
|
|
|
1990s |
Grew business around key photonics products and technologies |
|
|
|
|
1997 |
Entered the telecom components and test & measurement market |
|
|
|
|
2000 |
Completed IPO and secondary offering raising over $550 million |
|
|
|
|
2001 |
Acquired JCA Technology, a supplier of microwave RF amplifiers |
|
|
|
|
2002 |
Sold passive optical component product line to Finisar and network tunable laser technology to Intel |
|
|
|
|
Today |
Business focused on photonics tools and microwave RF amplifiers for diversified non-telecom markets |
7
(1) Optoelectronic tools and devices
Products
Modulators
Detectors
Laser sources
Precision actuators/optomechanics
Customers
Optoelectronics OEMs
Semicon equipment manufacturers
Manufacturers of metrology and test & measurement systems
[GRAPHIC]
Synergy in product breadth, laser infeeds, know-how
8
(2) Tunable lasers and systems
Products
Wide range of products
Benchtop tunable lasers and OEM subsystems
Widely tunable lasers and ultra-stable narrowly tunable lasers
Many wavelengths spanning 630 to 1600nm
Customers
OEM manufacturing
Optical sensing systems
Optical spectroscopy systems
Manufacturing test systems
Civil and defense R&D departments
[GRAPHIC]
Synergy in distribution, know-how, product breadth, chip infeeds
9
(3) Microwave RF amplifiers
Products
Comprehensive line of RF amplifiers for defense applications
Operating frequencies from 10 kHz to beyond 20 GHz
Ultra-Low Noise Amplifiers
Octave-Band Amplifiers
Ultra-Broad Band Amplifiers
Multi-Octave EW and ECM Amplifiers
Extended Radar-Band FET Amplifiers
Limiting Amplifiers
Tri-band Amplifiers
Narrow Band Power Amplifiers
[GRAPHIC]
Customers
Military/aerospace OEMs
Strong synergies with Bookhams current MMIC business
US market entry for Bookham
EU market entry for New Focus
MMICs infeeds to New Focus amplifiers
10
Diversified Blue Chip customers
[GRAPHIC]
Research
11
Expected to reduce dependency on major telecom customers
Q2 2003
[CHART]
Bookham
[CHART]
Bookham Pro forma
12
Location: San Jose, CA
Size: 60k sq ft
[PICTURE]
San Jose
Technical/business presence important asset for Bookhams planned expansion strategy
Two facilities: room for either expansion or cost-reduction
Location: Shenzhen, China
Size: 247k sq ft
[PICTURE]
China
State-of-the-art facility in Shenzhen Free Trade Zone, close to Huawei and with prime location overlooking Hong-Kong (currently empty)
13
New Focus business performance
$6.3 million gross revenues in Q2 2003, growing for last 3 quarters
Gross margin of 17% in Q2 2003
Approximately 200 employees at end Q2 2003
Important capabilities:
Strong emphasis on improving on-time delivery to customers
Inventory turns at >3x for photonics and >14x for RF
Clean receivables and inventory
Manufacturing strategy of keeping value-added in-house, outsourcing lower value-add (synergy with Bookham infeeds and Shenzhen manufacturing facility)
Low cost Asian supply chain; ISO certified
14
Financials
All US dollar numbers have been translated at £1.00 = $1.62
15
Business
Gross revenues of £3.9 million ($6.3 million) in Q2 2003
Gross margin of 17% in Q2 2003
Operating loss of £3.7 million ($6.0 million) in Q2 2003
Operating cash outflow of £2.9 million ($4.7 million) in Q2 2003
Synergies
G&A overlap
Manufacturing margin capture
Financial synergies
Asset base
Strong balance sheet
£65 million ($105 million) of cash on closing balance sheet
Valuable China facility
16
Anticipated operations integration and restructuring: proven track record
Both Bookham and New Focus have significant experience in successfully consolidating / moving facilities and lowering manufacturing overheads.
Bookham expects to realise significant savings through the utilization of New Focuss China facilities and manufacturing know-how
Bookham |
|
|
|
Plant consolidation |
|
|
Milton |
Paignton |
|
Ottawa |
|
|
Paignton |
|
|
Caswell |
|
|
Poughkeepsie |
|
|
Zurich |
|
|
|
|
Nice-France |
|
|
|
Plant consolidation |
|
|
3 facilities in Silicon Valley |
San Jose |
|
1 facility in Wisconsin |
Note: Quarterly overhead savings achieved in 2003
17
Anticipated post-combination cost reductions
G&A overlap
Elimination of New Focus public company expenses
G&A synergies with redundant functional headcount
Manufacturing margin capture
MMICs insourcing
Caswell and Zurich laser infeeds (lasers, receivers)
Santa Rosa coating operations
Low cost manufacturing facility in China
Expected total pre-tax synergies of £3 million to £5 million in 2004
Customer synergies (eg, in RF/MMICS) are expected to be additional
18
Pro-forma income statement (in £ million)
Q2 2003 |
|
Bookham |
|
New Focus |
|
Combined |
|
|||
|
|
|
|
|
|
|
|
|||
Revenue |
|
£ |
21.0 |
|
£ |
3.9 |
|
£ |
24.9 |
|
|
|
|
|
|
|
|
|
|||
Cost Of Sales (1) |
|
24.2 |
|
3.2 |
|
27.4 |
|
|||
|
|
|
|
|
|
|
|
|||
Gross Profit/(Loss) (1) |
|
(3.2 |
) |
0.7 |
|
(2.5 |
) |
|||
|
|
|
|
|
|
|
|
|||
R&D (1) |
|
8.1 |
|
1.5 |
|
9.6 |
|
|||
|
|
|
|
|
|
|
|
|||
SG&A (1) |
|
6.6 |
|
2.9 |
|
9.5 |
|
|||
|
|
|
|
|
|
|
|
|||
Operating Income / (Loss) (1) |
|
(17.9 |
) |
(3.7 |
) |
(21.6 |
) |
|||
|
|
|
|
|
|
|
|
|||
Operating Cash flow (2) |
|
(14.4 |
) |
(2.9 |
) |
(17.3 |
) |
|||
(1) Excludes charges which generslly have included restructuring costs
(2) Represents earnings before interest, taxes, depreciation and amortisation and excluding charges
Anticipated next steps
Announced restructurings Bookham
Ottawa fab closure
Other Bookham cost reductions
New Focus
Q3 staff reductions
Anticipated synergies of G&A consolidation of New Focus
Anticipated growth through market share gains and expansion of non-telecom revenues
19
Anticipated financial impact of proposed transaction
Summary balance sheet (in £ million)
Pro-forma 30 June 2003 |
|
Bookham |
|
New Focus |
|
Combined |
|
|||
|
|
|
|
|
|
|
|
|||
Cash & Short Term Investments (1) |
|
£ |
70.8 |
|
£ |
72.2 |
|
£ |
143.0 |
|
|
|
|
|
|
|
|
|
|||
Accounts Receivable |
|
14.8 |
|
1.6 |
|
16.4 |
|
|||
|
|
|
|
|
|
|
|
|||
Inventory |
|
16.6 |
|
2.1 |
|
18.7 |
|
|||
|
|
|
|
|
|
|
|
|||
Net Current Assets |
|
107.3 |
|
78.0 |
|
185.3 |
|
|||
|
|
|
|
|
|
|
|
|||
Long Term Liabilities |
|
(33.7 |
) |
(7.5 |
) |
(41.2 |
) |
|||
|
|
|
|
|
|
|
|
|||
Net Assets |
|
112.3 |
|
92.8 |
|
205.1 |
|
|||
(1) New Focus cash figures post distribution of £86 m to New Focus shareholders (and potential proceeds from New Focus option exercises) but excludes deal costs estimated at £7.5 m
20
Q3 03 revenue projection: £21 million to £24 million
Gross margin expected to improve by 10% or more
Exceptional charges projection: £14 million to £16 million
Q3 03 cash burn projection (including exceptionals): £20 million to £23 million
21
Strong market position: #2 in telecom, which would be balanced outside of telecom
Strong and expanding telecom customer base (NT/MONI/Huawei), which would be significantly de-risked
Strong revenue base (supply agreements)
Strong product line-up
Strong manufacturing base; proposed transaction would add low-cost manufacturing site
Operational execution
Deep management expertise
Strong financial position
Record of consolidation and successful integration
22
Thinking optical solutions
Important Additional Information will be filed with the Securities Exchange Commission
Bookham plans to file with the SEC a Registration Statement on Form F-4 in connection with the transaction and Bookham and New Focus plan to file with the SEC and mail to the stockholders of New Focus, a Joint Proxy Statement/Prospectus in connection with the transaction. The Registration Statement and the Joint Proxy Statement/Prospectus will contain important information about Bookham, New Focus, the transaction and related matters. Investors and security holders are urged to read the Registration Statement and the Joint Proxy Statement/Prospectus carefully when they are available.
Investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus and other documents filed with the SEC by Bookham and New Focus through the web site maintained by the SEC at http://www.sec.gov.
In addition, investors and security holders will be able to obtain free copies of the Registration Statement and the Joint Proxy Statement/Prospectus from Bookham by contacting Investor Relations on +44 (0) 1235 837000 or from New Focus by contacting the Investor Relations Department at +1 408 919 2736.
Bookham and New Focus, and their respective directors and executive officers, may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the merger agreement. Information regarding Bookhams directors and executive officers is contained in Bookhams Annual Report on Form 20-F for the year ended December 31, 2002, as amended, which is filed with the SEC. As of September 1, 2003, Bookhams directors and executive officers beneficially owned approximately 33,806,421 shares (including shares underlying options exercisable within 60 days), or 15.92%, of Bookhams ordinary shares. Information regarding New Focuss directors and executive officers is contained in New Focuss Annual Report on Form 10-K for the year ended December 29, 2002 and its proxy statement dated April 15, 2003, which are filed with the SEC. As of April 15, 2003, New Focuss directors and executive officers beneficially owned approximately 3,317,696 shares (including shares underlying options exercisable within 60 days), or 5.2%, of New Focuss common stock. A more complete description will be available in the Registration Statement and the Joint Proxy Statement/Prospectus.
Statements in this document regarding the proposed transaction between Bookham and New Focus, the expected timetable for completing the transaction, future financial and operating results, benefits and synergies of the transaction, future opportunities for the combined company and any other statements about Bookham or New Focus managements future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words believes, plans, anticipates, expects, estimates and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the ability to consummate the transaction, the ability of Bookham to successfully integrate New Focuss operations and employees, the ability to realize anticipated synergies and cost savings; recovery of industry demand, the need to manage manufacturing capacity, production equipment and personnel to anticipated levels of demand for products, possible disruption in New Focuss commercial activities caused by terrorist activities or armed conflicts, the related impact on margins, reductions in demand for optical components, expansion of our business operations, quarterly variations in results, currency exchange rate fluctuations, manufacturing capacity yields and inventory, intellectual property issues and the other factors described in Bookhams Annual Report on Form 20-F for the year ended December 31, 2002, as amended, and New Focuss Annual Report on Form 10-K for the year ended December 29, 2002 and New Focuss most recent quarterly report filed with the SEC and Bookhams most recent current reports on Form 6-K submitted to the SEC. Bookham and New Focus disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.
23