Highwave Optical Technologies

Highwave Optical Technologies Announces the Signing of a Memorandum of Understanding for the Acquisition of Northlight Optronics

    Lannion, France (ots/PRNewswire) - Highwave Optical Technologies (Nouveau Marché, HGWO), a leading supplier  of active optical fiber based components and subsystems for  telecommunications Dense Wavelength Division Multiplexing (DWDM) systems and the fiber laser, fiber optic sensor and defense markets, today announced the signing of a memorandum of agreement with the shareholders of Northlight Optronics for the acquisition of 100% shares of that company.

    Known as Ericsson's optoelectronics division until 2003, Northlight Optronics is a Swedish corporation which benefits from over 20 years of know-how in the design and production of high performance optical transmitters and receivers for long distance, metro and Ethernet networks, as well as Erbium Doped Fiber Amplifiers for the telecom and defence markets. Northlight Optronics' customer list includes: Lucent, Tellabs, Intel, Ciena, JDS Uniphase, and Scientific Atlanta. Thanks to its leading technological position in the optical transmitter / receiver market, the company is currently in the qualification phase with several other telecom equipment companies on next generation solutions which will be deployed as of 2005.

    The main shareholders of Northlight Optronics are CapMan, a leading Swedish private equity funds with around EUR 1.2 billion under management, Ericsson, a leading telecom equipment manufacturer and European Digital Partners, a Swedish investment fund.

    This acquisition, to be completed on the basis of a EUR 16 million valuation of Northlight Optronics, would be financed through the issuance, in favor of its shareholders, of 26.7 million new shares of Highwave at a price of 0.60EUR per share. The 0.60EUR per share valuation for Highwave assumes that the proposed acquisition of DA-LightCom has been achieved and also takes into account the average closing price of the Highwave shares for the last 45 days until the signing of this Memorandum. On the basis of a closing date on February 28, 2005, the shareholders will guarantee that Northlight Optronics will have a positive cash situation of no less than USD 4.1 million at the closing date and that the company will have no financial debt. The shareholders of Northlight Optronics would also receive 2.740.182 subscription options ("bons de souscription d'action") with a maturity date on January 29, 2007 and a strike price of 0.90EUR per share. The full exercise of these options would provide Highwave with an additional cash amount of EUR 2.466.164. A complete description of the transaction will be presented to the shareholders of the company in a Document E which will be filed with the Autorité des Marchés Financiers. The shareholders of Highwave will then be convened at an extraordinary general meeting to approve the transaction.

    The company mentions that the completion of this transaction is subject to the prior approval, by the shareholders of Highwave, of the acquisition of DA-LightCom.

    In reference to the proposed transaction, Sylvain Boj, COO of Highwave, commented:

    "With revenues of about USD 2.3 million for the first 9 months of 2004, Northlight Optronics brings several benefits to Highwave:

@@start.t1@@      - The combination of Highwave's know-how in the passive components domain
         to Northlight Optronics' technological leadership in the active
         components sector will allow a unique, global market offering which is
         highly sought-after by our major customers.
      - Northlight Optronics' strong presence in North America added to our
         client base in Europe and Asia will create strong commercial synergies
         without overlap in the revenues of either organization.
      - Northlight Optronics has adopted since this summer a business model
         similar to Highwave's, i.e. based on the reduction of fixed costs. As a
         result, the combination of our component purchasing and Asian
         outsourcing functions should have a positive impact on the
         profitability of the combined entity. In that regard, even though
         Northlight Optronics has made an operating loss of USD 5.7 million for
         the first 9 months of 2004, this past performance does not represent a
         relevant benchmark for the expected performances of the company in the
         future.
      - With the acquisition of DA-LightCom, planned prior to this transaction,
         the combination of Northlight Optronics, DA-LightCom and Highwave
         provides strong synergies in technologies and sales.@@end@@

    François Leraillez, CEO, concludes on the strategic vision of the group:

    "The acquisition of Northlight Optronics is another step in our ambition to be among the five world-wide actors in the optical sector within the next three years, thanks to our capacity to respond to our clients' overall needs, our international presence and our technological superiority. With Northlight Optronics' active sub-system technology, Highwave more than doubles its addressable market size and intends to gain market share aggressively in all segments and to achieve its growth strategy as the optical market shows signs of significant recovery. This transaction depends on the prior approval of the acquisition of DA-LightCom. We count on the strong support of our shareholders to validate our growth strategy by voting favourably during the next two extraordinary general meetings."

    This press release may contain forward looking information based on  estimates and assumptions by management as well as information available to  management. These estimates and assumptions are subject to risks and  uncertainties capable of making the actual results of the company differ  substantially from the results presented explicitly or implicitly in these  forward looking statements. The current release should not be viewed as  offering any degree of certainty to such forward looking statements.

    About HighWave Optical Technologies

    Highwave Optical Technologies is one of the leading suppliers of active  fibers and subsystems for Dense Wavelength Division Multiplexing (DWDM)  telecom systems and the optical laser fiber industry, fiber optic sensor and  defense markets. Since its creation in 1998, the company has established  itself as one of the leading suppliers of optical amplifiers and components  for the largest manufacturers in the telecommunications market. The company  is based in Lannion, France. Since its stock market listing in June 2000, shares of Highwave Optical Technologies have been traded on the Euronext  Paris market (HGWO). For more detailed information, please consult our  Internet site: www.highwave-tech.com

ots Originaltext: Highwave Optical Technologies
Im Internet recherchierbar: http://www.newsaktuell.ch

Contact:
François Leraillez, CEO, Highwave Optical Technologies,
+33-(0)2-96-04-20-00; Sylvain Boj, COO, Highwave Optical
Technologies, +33-(0)2-96-04-20-00



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