Sees deal over 10% accretive to comparable EPS by 2027 (Il Sole 24 Ore Radiocor) - Helsinki, 28 Jun - Finnish telecoms technology company Nokia said it has reached an agreement to buy US networking solutions provider Infinera in a transaction valuing the company at 6.65 dollars per share or an enterprise value of 2.3 billion dollars.

The transaction represents a premium of 28% to Infinera's share price at the close of June 26, 2024 and a 37% premium to the trailing 180-day volume weighted average price (VWAP).

At least 70% of the consideration will be paid in cash and Infinera's shareholders can elect to receive up to 30% of the aggregate consideration in the form of Nokia ADSs.

Nokia's board of directors has committed to increase and accelerate Nokia's share buyback program to offset the dilution from the deal.

"Nokia and Infinera see a significant opportunity in merging to improve scale and profitability, enabling the combined business to accelerate the development of new products and solutions to benefit customers. The transaction aligns strongly with Nokia's strategy, as it is expected to strengthen the company's technology leadership in optical and increase exposure to webscale customers, the fastest growing segment of the market," the companies said.

"The combination with Infinera is projected to accelerate Nokia's journey to a double-digit operating margin in its Optical Networks business. Nokia targets to achieve EUR 200 million of net comparable operating profit synergies by 2027." The transaction is expected to be accretive to Nokia's comparable earnings per share in the first year post close and to deliver over 10% comparable EPS accretion by 2027, with a return on invested capital (RoIC) comfortably above Nokia's weighted average cost of capital (WACC).

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(RADIOCOR) 28-06-24 07:55:48 (0076) 5 NNNN