Filed by TranSwitch Corporation
Pursuant to Rule 425 under the
Securities Act of 1933 and deemed
filed pursuant to Rule 14a-12 of
the Securities
Exchange Act of 1934
Subject Company: Centillium
Communications, Inc.
Commission File No.: 000-30649
Corporate Update
TranSwitch Corporation
September 15, 2008
Proprietary and Confidential
Information set
forth in this communication contains forward-looking statements, which involve a number of risks and uncertainties. Such forward-looking statements include, but are not limited to, statements about the timing of the completion of the transaction,
the anticipated benefits of the transaction, including future financial and operating results and estimated cost savings and synergies, and other statements that are not historical facts. TranSwitch and Centillium caution readers that any
forward-looking information is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking information due to various risks and uncertainties.
These include risks and uncertainties relating to: the parties’ potential inability to complete the transaction because conditions to
the closing of the transaction may not be satisfied; the risk that the businesses will not be integrated successfully and without delay; the risk that the transaction may involve unexpected costs or unexpected liabilities; uncertainties concerning
the effect of the transaction on relationships with customers, employees and suppliers of either or both companies; risks associated with downturns in economic conditions generally and in the telecommunications and data communications markets and
the semiconductor industry specifically; risks in product development and market acceptance of, and demand for, both companies products and products developed by the companies’ customers; risks relating to TranSwitch’s indebtedness; risks
of failing to attract and retain key managerial and technical personnel; risks associated with foreign sales and high customer concentration; risks associated with competition and competitive pricing pressures; risks associated with investing in new
businesses; risks of dependence on third-party VLSI fabrication facilities; risks related to intellectual property rights and litigation; risks in technology development and commercialization. The risks included above are not exhaustive. The annual
reports on Form 10-K, the quarterly reports on Form 10-Q, current reports on Form 8-K, any amendments thereto, and other documents TranSwitch and Centillium have filed and will file with the SEC contain additional factors that could impact the
company’s businesses and financial performance. TranSwitch and Centillium expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any such statements to reflect any change in expectations or any change
in events, conditions or circumstances on which any such statement is based.
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TranSwitch Corporation Proprietary and Confidential
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Important
Information for Investors and Stockholders
TranSwitch has filed Registration Statement on Form S-4 (File
No. 333-153148), which contains a Preliminary Proxy Statement/Prospectus. Centillium expects to mail a Definitive Proxy Statement/Prospectus to its stockholders concerning the proposed merger of Centillium with a subsidiary of TranSwitch.
TRANSWITCH AND CENTILLIUM URGE INVESTORS AND STOCKHOLDERS TO READ THE PROXY STATEMENT/PROSPECTUS WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED BY EITHER PARTY WITH THE SEC BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION.
Investors and stockholders will be able to obtain the proxy statement/prospectus and other documents filed with the SEC free of charge at the website maintained by the SEC at www.sec.gov. In addition, documents filed with the SEC by
TranSwitch will be available free of charge on the investor relations portion of the TranSwitch website at www.transwitch.com. Documents filed with the SEC by Centillium will be available free of charge on the investor relations portion of the
Centillium website at www.centillium.com.
Participants in the Solicitation
This communication is not a solicitation of a proxy from any security holder of Centillium. However, Centillium, and certain of its
directors and executive officers, may be deemed participants in the solicitation of proxies from the stockholders of Centillium in connection with the merger. The names of Centillium’s directors and executive officers and a description of their
interests in Centillium (including their ownership of Centillium stock) are set forth in the proxy statement for Centillium’s 2008 annual meeting of stockholders, which was filed with the SEC on April 29, 2008. Investors and stockholders
can obtain more detailed information regarding the direct and indirect interests of Centillium’s directors and executive officers in the merger by reading the definitive proxy statement/prospectus when it becomes available.
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TranSwitch Corporation Proprietary and Confidential
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Our Business
We Provide Key Semiconductor Solutions for Equipment Used in Communications Networks
Network Equipment OEMs
Service Providers
Technology Enabler
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TranSwitch Corporation Proprietary and Confidential
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Mission
“To develop and supply the most innovative VLSI solutions to telecommunications and data communication OEMs
worldwide”
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TranSwitch Corporation Proprietary and Confidential
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Company Profile
2008 Revenue Trend: Revenue Ramp in Recent Products
Q1 revenue $7.5M
Q2 revenue $8.9M (grew 18% over Q1)
Q3 revenue guidance $10.2M ( Projected growth 14% over Q2)
Gross Margin (2007) 62% (Composite of all Product and Service margin)
Communications IC product Gross Margin ~ 75% Strong Intellectual Property Position More than 125 active customers worldwide
Employees (As of June 30, 2008)
218 Total Employees Worldwide
Research & Development: 166
Sales & Marketing: 28
Operations: 12
Administration: 12
Key Balance Sheet Items ($MM) June 30, 2008:
Cash & Investments $26.6 M
Total Assets $59.5 M
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TranSwitch Corporation Proprietary and Confidential
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Attractive
Business Model
Video Processing “HDMI & DisplayPort” Business Unit
Comm. VLSI “Application Specific Solutions” Business Unit
ADC Specific “Customer Specific Solutions” Business Unit
HDMI / Display port IP
HDP (combined) IP
HDMI Tx/Rx IC Products
Carrier Ethernet
Wireless Backhaul
Broadband Access
Fiber-to-the Home
Voice Over IP
Comm IC customers
Defense customers
Industrial control /Automotive
2006 Mysticom Acquisition
2008 Centillium Acquisition (Pending)
2007 ASIC Design Centre Acquisition
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TranSwitch Corporation Proprietary and Confidential
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Focused on
Enabling “Network Convergence” (PON)
Broadband Wireline Access Network
Internet
Optical Network Unit
Data Traffic
Optical Network Unit
Optical Line Terminator
Radio Network Controller
Gateway System
Base Station
Core Network based on IP/MPLS
Voice Traffic
3rd Generation Wireless Access Network
Public Phone Network
Base Station
3G Wireless
Video, Data and Mobility Services Driving Network Upgrades
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TranSwitch Corporation Proprietary and Confidential
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Summary of
Communications Business
TranSwitch is focused on three High Growth Segments
Broadband Access
Carrier Ethernet
Wireless Backhaul
Communications Market has Robust Growth Drivers
Carriers are healthy and RFP activity is strong
Spending in North
America & Europe driven by service provider competition
India / China and other developing countries investing to
grow their economies
We have a strong design win position in key carrier projects
British Telecom (Fujitsu, ADVA)
China Telecom /China Mobile, etc. (Alcatel, ZTE, Fiberhome, Datang)
BSNL (Tejas, UTL, ZTE,
Redback)
Korea Telecom (Coweaver, Woorinet, Kisantel, Neowave, ZTE)
AT&T, Verizon (Tellabs, Ericsson, Motorola, Adtran)
Our position is secure, and we anticipate growth
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Proprietary and Confidential
Entering the High
Definition Video Market—Rationale
High growth potential over the next several years
500
450 HDMI
Disp. Port
400
350
300
(Million)
250
200
150
100
50
0
2007 2008 2009 2010 2011
We have a strong technology edge against competition
10 Gigabit Serdes / PHY technology —thru Mysticom acquisition
Strategic Fit to our Communications Business—Longer Term
Video is a key driver for Broadband Access
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HDMI – High
Definition Multimedia I/F
Multiplexing video and audio on the same cable
HDMI cable
Source:
DVD player
Set-Top Box Controls
Sink:
HDTV
Projector
Controls
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DisplayPort –
Emerging Computer Industry Standard
Computer / Workstation
Flat Panel Display
DisplayPort Cable
DisplayPort Monitor
Graphic Processor Unit (GPU)
DP MAC
DP Tx PHY
DisplayPort
DisplayPort
DP Rx PHY
DP
MAC
DisplayPort Only LCD Monitor
TFT-LCD Panel
Tcon
BA
CD CD CD
CD CD CD CD CD
24C16
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HDP = HDMI +
DisplayPort
By using different cables (DP-to-DP, DP-to-HDMI, HDMI-to-DP, or HDMI-to-HDMI) can serve all combinations for PC
and CE markets
Graphic Processor Unit (GPU)
HDMI MAC
DP MAC
HDMI + DP Tx PHY
DisplayPort
DP -to -HDMI Cable
TV
DP -to
-DP Cable
Monitor
Host I/F
PC
DMA
STB
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Centillium
Acquisition – Highlights & Rationale
The two companies have an excellent strategic fit
Both are in high-growth markets
Technology and product lines are complementary
Customer bases are complementary and overlapping
Centillium is “just the right size”
Large enough to provide meaningful scale
But small enough to be easily
integrated
The transaction is highly accretive, with low integration risk
$10.5M in identified synergies, achievable in near term
Multiple cross-selling opportunities
The combination creates significant
advantages
Increased scale
Improved profitability and operating leverage
A stronger platform to
accelerate growth and market share
Winning Combination Creates a New Global Communications IC Leader!
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Benefits for
TranSwitch
Industry leading VoIP and PON products added to portfolio
Incremental revenue stream from established design wins
$22 M/yr run rate in 2008
Significant growth in 2009 as major carrier
deployments ramp
Adds $8 million cash to balance sheet
Net of all transaction and restructuring costs
Talented and motivated employees with complementary skill sets
Development
team in India Strong worldwide Sales team
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Transaction
Overview
Transaction
TranSwitch will purchase Centillium in a stock and cash transaction valued at $42.8 million at the time of announcement
Consideration
$15 million cash
25 million shares of TranSwitch stock
TranSwitch will have a net increase in cash of ~ $8 million after all restructuring and transactions costs
Pro Forma Ownership
TranSwitch shareholders retain 84% of the combined
company
Conditions to Close
Centillium shareholders will own 16%
Centillium shareholder approval
Customary closing conditions
Anticipated Close Fourth Quarter 2008
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and Confidential
Complementary
Products
The companies have complementary product lines with no overlap
Opportunity for $10.5 million synergy in COGS, and Opex (R&D, G&A, M&S)
Non-Telecom
4%
Carrier Ethernet 8%
FTTP 39% Broadband Access 26% Optical
Transport VoIP 62% 61%
2007 Revenue 2007 Revenue
$32.6 million $15.3 million
Product Lines: Excellent Strategic Fit
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Proprietary and Confidential
Complementary
Customer Bases
The two companies have overlapping customer bases
Customer Universe: Excellent Strategic Fit
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Combined
Company—Focused on High Growth Markets
Broadband Access Carrier Ethernet HDMI / Disp. Port
500 Broadband Access 6 700 450 Subscribers
600 HDMI Disp. Port 5 400 (Worldwide) Carrier Ethernet
350 500
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Service Revenues Port Shipments 300 (Worldwide)
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400
(Worldwide)
250 3
(Million) 200 (Billion) (Million) 300
150 200 100
0 0
0 2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2011 2012
2007 2008 2009 2010 2011
Source: UBS Global Telebits 2008 Source: Insight Research, 2008 Source: In-Stat 2007, iSuppli 2008
VoIP FTTP
Infrastructure CPE 90 1000 900 80 800 VoIP Port Shipments 70
(Worldwide) FTTP Households
700 60
Connected 600 50 (Worldwide)
500
40
400 (Million) (Million) 300 30
20 200 10 100
0 0
2006 2007 2008 2009 2010 2005 2006 2007 2008 2009 2010 2011 2012
Source: In-Stat, December 2006 Source: Heavy Reading Worldwide FTTH Update, February 2008
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Centillium is Well
Positioned in Japan
Centillium products will be at the heart of a massive $47 billion infrastructure upgrade in Japan
Over 20 million FTTH subscribers are targeted by 2010
The Mustang chip will be at the heart of the OKI platforms that are being deployed
Already shipped several million dollars of product Designed into a second vendor’s platform as well Deployment set to accelerate We
expect a greater than 40% share starting in mid 2009
Potential of > $100 million in revenues over five year deployment!
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Excellent
Strategic Fit !
Centillium is “just the right size”
Large enough to provide meaningful scale
But small enough to be easily integrated
Both are in high-growth markets
Technology and product lines are complementary
Customer bases are complementary and overlapping
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Summary
TranSwitch is well positioned in the communications VLSI market
Selectively addressing three high growth segments
Selected segments support high gross margin, and long product life Established an extensive footprint in key network initiatives worldwide
Company has successfully diversified through strategic acquisitions High Definition Video (HDMI / DisplayPort) Customer Specific Telecom
and Non-Telecom VLSI products
Centillium acquisition is a major “transformative” opportunity Combined company
well positioned in multiple high growth markets, and poised for substantial revenue momentum in 2009 Highly synergistic and accretive transaction
$10.5 million of expense synergies for 2009 have already been identified
Balance sheet
strengthened by $8 million (net of transaction and restructuring costs) Integration risks extremely low due to similarity of company operations
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Thank You
Centillium Communications (NASDAQ:CTLM)
過去 株価チャート
から 5 2024 まで 6 2024
Centillium Communications (NASDAQ:CTLM)
過去 株価チャート
から 6 2023 まで 6 2024
