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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
AND EXCHANGE ACT OF 1934
Commission File Number 0-29811
Date of Report: October 25, 2000
NEW FOCUS, INC.
(Registrant)
Incorporated in the State of Delaware
I.R.S. Employer Identification Number 33-0404910
2630 Walsh Avenue, Santa Clara, California 95051
Telephone: (408) 980-8088
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ITEM 5: OTHER EVENTS
The Company issued the following press release on October 25, 2000:
NEW FOCUS AND JCA TECHNOLOGY SIGN DEFINITIVE MERGER AGREEMENT
FOR IMMEDIATE RELEASE:
SANTA CLARA, California (October 25, 2000): New Focus, Inc. (Nasdaq: NUFO), a
leading supplier of innovative fiber optic products for next-generation optical
networks under the Smart Optics for Networks(TM) brand, today announced that it
has signed a definitive agreement with JCA Technology, Inc. under which New
Focus will acquire JCA in a transaction valued at $600 million. The merger
consideration is composed of $575 million of New Focus common stock and $25
million in cash. The merger will be accounted for as a purchase transaction and
will result in significant goodwill based on the underlying book value of JCA's
assets.
JCA, a privately-held company located in Camarillo, California, has supplied the
fiber optics industry with data drivers, clock amplifiers, power amplifiers, and
custom components for OC-48 (2.5 gigabits per second) and OC-192 (10 gigabits
per second) applications since 1999. JCA's products, based on its microwave and
radio frequency know-how and intellectual property, fit synergistically with New
Focus' high-speed opto-electronics intellectual property and product roadmap.
New Focus possesses high-speed chip design capabilities in both gallium arsenide
and indium phosphide and expertise in the design and manufacture of high-speed
opto-electronic components. While the customer sets of New Focus and JCA
overlap, each company also has some unique customers, thus creating an expanded
customer base for the combined company.
Based on unaudited results, JCA operated profitably during the first nine months
of 2000 on revenues of approximately $13.9 million. In a separate press release
today, New Focus reported its three-month and nine-month financial results for
fiscal 2000.
"The New Focus team is thrilled and excited about the potential synergies in the
combination of New Focus and JCA. From a technology standpoint New Focus brings
expertise in optics and high-speed opto-electronics, while JCA brings expertise
in microwave electronics and packaging to the combined company. Through this
combination we add strength to our capabilities in the design and manufacture of
active components. From a financial perspective, we expect that the future
revenue growth at JCA will be strong due to the customer demand for JCA's
current and new product offerings. Furthermore, the gross and operating margin
percentages at JCA are already higher than New Focus' actual third quarter
margins and targeted margins for next year. As a result, we expect that this
transaction will be immediately accretive in the first full quarter of combined
operations to our revenue and margin lines, measured on a pro forma per share
basis excluding acquisition-related charges such as goodwill and compensation
expenses," said Ken Westrick, president and chief executive officer of New
Focus.
"Through the combination of New Focus and JCA we have a unique opportunity to
apply the complementary skill sets of our two companies to develop innovative
opto-electronic components for the fiber optics industry. JCA has already
generated considerable customer demand for its latest product designs that
address OC-192 applications. We need to finalize these product qualifications
and scale our manufacturing operations and corporate infrastructure to take
advantage of these business opportunities. The resources available through New
Focus will help us realize these opportunities more rapidly. In addition to the
complementary nature of our technologies, the management team at JCA believes
that the corporate cultures of New Focus and JCA will blend together very well,"
said James Chao, president and chief executive officer of JCA.
The number of New Focus common shares issued in the transaction will be
determined by the average price of New Focus' common stock for a ten-day trading
period prior to the closing of the transaction. The number of shares is also
subject to a collar that restricts the number of shares to no fewer than
5,016,778 shares and no more than 10,033,556 shares. Completion of the
transaction is subject to customary
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closing conditions and regulatory approvals. The transaction is expected to
close in the fourth quarter of 2000. Following completion of the transaction,
JCA will operate as a wholly owned subsidiary of New Focus and JCA shareholders
will own between approximately 7.3% and 13.6% of the combined company.
Credit Suisse First Boston acted as financial advisor to New Focus in this
transaction and CIBC World Markets acted as financial advisor to JCA.
FORWARD-LOOKING STATEMENTS:
This press release contains predictions, estimates and other forward-looking
statements which include, but are not limited to, statements regarding the
likelihood and timing of the closing, the possible expansion of the combined
company's customer base, the future financial performance of JCA, the
synergistic effects of the proposed combination in terms of product development,
corporate culture and capacity expansion, and the accretive nature of the
transaction on New Focus' future financial results. These statements are subject
to risks and uncertainties and actual results may differ materially from any
future performance suggested above. In particular, risks and uncertainties
associated with the near term financial performance of JCA include the ability
to adapt and qualify product designs that fit specific customer requirements and
the ability to scale the manufacturing operations and corporate infrastructure
to accommodate the higher projected revenue levels. To realize the synergistic
effects related to next-generation products, New Focus and JCA must integrate
the efforts of various design and development teams at different sites and there
is no assurance that such integration will be completed successfully. Risk
factors that may affect New Focus' financial performance are listed in the
company's S-1 registration statement for its follow-on public offering on file
with the SEC. New Focus and JCA undertake no obligation to publicly release any
revisions to these forward-looking statements, which may be made to reflect
events or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
ABOUT JCA TECHNOLOGY:
JCA Technology, a privately-held company, designs, manufactures and markets a
full line of fiber optic products for OC-48 and OC-192 modulators, including
high-speed clock amplifiers and broadband data driver amplifiers. Founded in
1985, the company developed a leadership position in state-of-the-art, thin-film
hybrid microwave amplifiers, switches, and subassemblies for the defense,
wireless and satellite communications markets. Leveraging its technology and
manufacturing capabilities, the company entered the fiber optic market in 1999.
The company employs approximately 185 people at its 42,000 square foot
headquarters and manufacturing facility in Camarillo, California.
ABOUT NEW FOCUS:
New Focus designs, manufactures and markets innovative fiber optic products for
next-generation optical networks. The company's Smart Optics for Networks(TM)
products enhance the performance of next-generation optical networks by enabling
higher channel counts, faster data rates, longer reach lengths, new service
capabilities, and lower costs of ownership. Founded in 1990, the company remains
a leader in the creation of advanced optical products for the commercial and
research marketplaces. With over 1,100 worldwide employees, the company is
headquartered in Santa Clara, California and has operations in San Jose,
California, Madison, Wisconsin, and Shenzhen, People's Republic of China.
For more information about New Focus visit the company's Internet home page at
http://www.newfocus.com, call our Investors Relations Department at
408-919-2700, or e-mail us at [email protected].
COMPANY CONTACT:
William L. Potts, Jr., Chief Financial Officer 408-919-5384
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Santa Clara, State of
California, on October 26, 2000.
NEW FOCUS, INC.
(Registrant)
DATE: October 26, 2000 BY: /s/ William L. Potts, Jr.
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William L. Potts, Jr.
Senior Vice President
and Chief Financial
Officer
