Notable Mergers and Acquisitions of the Day 03/27: (OCLR)/(OPXT) (BP) (ISTA) (HOGS) (SCMF)

• After the market closed Monday, Oclaro, Inc. (Nasdaq: OCLR), and Opnext, Inc. (Nasdaq: OPXT), entered into a definitive agreement to merge in an all-stock transaction. Under the terms of agreement, Opnext shareholders will receive a fixed ratio of 0.42 shares of Oclaro common stock for every share of Opnext common stock they own.
  
  The Oclaro and Opnext merger is expected to mark a major transformation in the optical industry, bringing together over 30 years of combined telecom and datacom optical technology innovation. The merger will create a new industry leader in the fast-growing optical components and modules market, forecast to reach $9.2 billion in 2015. The broad product portfolio, technology innovation, engineering resources, cost structure and strategic customer relationships of the combined company are expected to expand its opportunities for growth and to create long-term shareholder value.
  
  
  Data-intensive applications such as video and cloud computing, and the proliferation of mobile devices, are driving the need for increased performance and bandwidth throughout the core optical networks, at the heart of the world's Internet traffic. These trends are also forcing enterprises and data centers to upgrade and deploy new data communications infrastructures.
  
  As a result, traditionally separate telecom and datacom networks are converging, leveraging advanced optical networking technologies from companies such as Opnext and Oclaro. The combined company will be well positioned to capitalize on these trends to become the No. 1 supplier to the core optical networks with a strong leadership position in the fastest-growing 40G and 100G segment, which is expected to grow at a CAGR of 42% through 2015. The broader product line resulting from the merger strengthens the combined company's position as a key supplier to existing and new customers.
  
  Upon the close of the transaction, Opnext shareholders will own approximately 42% of the combined company.
  
  The combined company is expected to achieve positive non-GAAP operating income in the first full quarter after the close and is expected to achieve annualized cost synergies of $35 million to $45 million within 18 months of the close of the transaction. The company expects restructuring and system integration costs to total $20 million to $30 million.
  
  The transaction is subject to customary closing conditions, including approval by the shareholders of both companies and the receipt of regulatory approvals in the U.S., and is expected to close within three to six months.
  
  Oclaro and Opnext will each be filing the full text of the merger agreement with the Securities and Exchange Commission (the "SEC") on Form 8-K within four business days of the date of this release. Investors and security holders of each company are advised to review those filings for the full terms of the proposed combination, as well as any future filings made by the companies, including the Form S-4 Registration Statement and related Joint Proxy Statement/Prospectus.
  
  
• BP plc (NYSE: BP) has agreed to sell its interests in its southern gas assets (SGA) in the UK North Sea to Perenco UK Ltd for $400 million in cash.
  
  As it continues the active management of its business portfolios around the world, focusing on core activities and future growth, BP expects to divest assets with a total value of $38 billion between 2010 and the end of 2013. Including the agreement to sell SGA, the company has now announced divestments with an expected value totalling approximately $23 billion.
  
  Perenco has made an initial payment to BP of $100 million in cash and the remaining $300 million will be paid on completion, which is expected before the end of 2012. A further $10 million may be paid in the future contingent on the prevailing gas prices. Completion of the sale is subject to a number of third party and regulatory approvals. It is expected that impacted BP employees working for SGA will transfer with the asset to Perenco.
  
  
• Also after the market closed Monday, Bausch + Lomb, and ISTA Pharmaceuticals, Inc. (Nasdaq: ISTA) signed a definitive agreement under which Bausch + Lomb will acquire ISTA for $9.10 per share in cash, or a total of approximately $500 million. The transaction, which has been unanimously approved by the boards of directors of both companies, is expected to close in the second quarter of 2012.
  
  Bausch + Lomb currently intends to finance the acquisition with a combination of cash on hand and the proceeds of a $350 million incremental term loan facility to be provided under its existing credit facility and available borrowings under its existing revolving credit facilities or, alternatively, to obtain other financing in lieu of the foregoing (provided that Bausch + Lomb intends in all cases to have a combination of cash on hand and committed financing sufficient to finance the acquisition).
  
  Bausch + Lomb's acquisition of ISTA accelerates the company's strategy to strengthen its pipeline and marketed products and capabilities. The transaction is expected to drive growth and high performance for the long term.
  
  
• Capital Bank Financial Corp., parent of Capital Bank, N.A., signed a definitive agreement to acquire 100% of the stock of Southern Community Financial Corporation (Nasdaq: SCMF) for $2.875 per share. SCMF is the parent of Southern Community Bank and Trust, a bank with $1.5 billion in assets and 22 branches in Winston-Salem, the Piedmont Triad, and other North Carolina markets.
  
  SCMF shareholders may elect to receive their payment in cash or stock, with total consideration consisting of 40% cash and 60% newly issued shares of CBF, which will be exchanged at a fixed ratio of 0.131 based on a value for CBF of $22 per share, subject to certain adjustments. Additionally, SCMF shareholders will receive non-transferable contingent value rights entitling them to receive up to $1.30 per share in cash five years after the effective date of the transaction based on 75% of the savings to the extent that legacy loan and foreclosed asset losses are less than a prescribed dollar amount.
  
  Pro forma for the transaction, Capital Bank, NA will have $8.1 billion in assets and 165 branches in North Carolina, South Carolina, Tennessee, Virginia, and Florida.
  
  The transaction is subject to shareholder and regulatory approvals, the registration of CBF’s common stock and other customary closing conditions and is expected to close in the second quarter of 2012.
  
  Wachtell, Lipton, Rosen & Katz acted as legal advisor for CBF. Stifel, Nicolaus & Co., Inc. served as financial advisor and Williams Mullen as legal advisor to SCMF.
  
  
• Wabash National Corporation (NYSE: WNC) entered into a definitive agreement to acquire Walker Group Holdings LLC, a leading manufacturer of liquid-transportation systems and engineered products for $360 million. The all cash transaction is anticipated to be immediately accretive to the Company's net income and is expected to close in the second quarter, subject to regulatory approval. Wabash has received committed financing from Morgan Stanley and Wells Fargo of up to $450 million to fund the purchase price and provide additional financial resources.
  
  Commenting on the transaction, Wabash National's President and Chief Executive Officer, Richard Giromini said, "Consistent with our diversification strategy, we are very excited to join forces with Walker, a clear leader in a complementary and growing market. The Company has a leading position in nearly every one of its product categories, well-known brands, strong customer relationships that span over decades, and high margin products supported by industry leading innovation and low cost manufacturing. We are particularly pleased to be adding a deep and talented team under the leadership of Doug Chapple. Our two companies share a strong cultural fit and we look forward to completion of the transaction to then begin to integrate best practices, leverage individual talents, and accelerate strategic growth initiatives across the combined entity."
  
  
• Zhongpin Inc. (Nasdaq: HOGS) received a preliminary, non-binding proposal from its Chairman and Chief Executive Officer, Mr. Xianfu Zhu, which stated that Mr. Zhu intends to acquire all of the outstanding shares of the Company's common stock not currently owned by him in a going private transaction at a proposed price of $13.50 per share in cash. Mr. Zhu currently beneficially owns approximately 17.5% of the Company's common stock. A copy of the proposal letter is attached hereto as Exhibit A.
  
  The Company's Board of Directors intends to form a special committee of independent directors to consider this proposal and any additional proposal that may be made by Mr. Zhu and his affiliates, if any. There can be no assurance that any definitive offer will be made, that any agreement will be executed or that a transaction with Mr. Zhu or any other transaction will be approved or consummated.
  
  
• Sify Technologies Limited (Nasdaq: SIFY), reached an agreement for sale of their entire stake in MF Global Sify Securities India Pvt Ltd. for an all cash deal.
  
  According to the terms of the agreement entered with MF Global Sify Securities India Pvt Ltd., MF Global Overseas Limited and PhillipCapital Group, the Singapore based financial services company, through its related companies, will buy a majority stake in MF Global Sify Securities India Private Limited. The transaction is subject to regulatory and statutory approvals in the respective countries.

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