1032-00005 · Whitfield, Prager & Loomis LLP · Regulatory/Antitrust

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ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL

DRAFT — HART-SCOTT-RODINO PREMERGER NOTIFICATION AND REPORT FORM

Prepared for Filing by Halcyon Semiconductor Aktiengesellschaft (Acquiring Person)

Prepared by: Howard Bellamy Specialist Partner, Antitrust & Competition Calderwood & Harkness LLP 1333 New Hampshire Avenue NW, Suite 700 Washington, DC 20036

Date of Preparation: August 16, 2023 Anticipated Filing Date: August 18, 2023

Filed with: Federal Trade Commission, Premerger Notification Office and Antitrust Division, United States Department of Justice

Calderwood & Harkness Engagement Number: 1032-00005

DRAFT — FOR INTERNAL REVIEW AND COMMENT PRIOR TO FILING ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL

Contact Information for Filing Counsel:

Howard Bellamy Calderwood & Harkness LLP 1333 New Hampshire Avenue NW, Suite 700 Washington, DC 20036 Telephone: [to be completed]

Email: [to be completed]

TRANSMITTAL MEMORANDUM

MEMORANDUM

ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL

Dear Luisa and Oliver:

Enclosed for your review and comment is the draft Hart-Scott-Rodino Premerger Notification and Report Form (the "HSR Form" or "Notification") to be filed on behalf of Halcyon Semiconductor Aktiengesellschaft ("Halcyon") in connection with the proposed acquisition of Vectris Photonics, Inc. ("Vectris") pursuant to the Agreement and Plan of Merger dated August 10, 2023 (the "Merger Agreement").

Filing Fee. The filing fee for this transaction has been calculated based on the aggregate transaction value of $800,000,000. Under the current HSR filing fee schedule, this transaction falls within the applicable fee bracket, and the precise fee amount is set forth in the Filing Fee Calculation section of this draft. I would ask that Halcyon's treasury department — specifically Markus Ellinger, CFO — arrange for payment of the filing fee by wire transfer to the FTC Premerger Notification Office in advance of the anticipated August 18, 2023 filing date. Wire transfer instructions are set forth in the Filing Fee Calculation section below. Timely receipt of the filing fee by the FTC is a prerequisite to acceptance of the Notification, and accordingly, I would recommend that the wire transfer be initiated no later than the morning of August 17, 2023, to allow for settlement prior to filing.

Request for Comments. I respectfully request that all comments on this draft be provided to me by close of business on Thursday, August 17, 2023, to permit finalization and filing on Friday, August 18, 2023. Any comments may be directed to me by email or telephone. Oliver, I would also appreciate your review of the transaction description in Item 3 and the financing summary in Item 3(c) to ensure consistency with the final Merger Agreement and the Meridian Atlantic Bank commitment letter.

Vectris Parallel Filing. Vectris Photonics, Inc. will make its own HSR filing through Whitfield, Prager & Loomis LLP. Catherine Whitfield and Douglas Prager are serving as Vectris's antitrust counsel for purposes of this filing. I have been in regular coordination with Douglas Prager regarding the timing and substance of Vectris's parallel filing, and it is our mutual expectation that both filings will be made on the same date — August 18, 2023. Both filings must be received by the agencies before the initial 30-day waiting period commences. I will continue to coordinate with Whitfield, Prager & Loomis on any substantive questions that arise during the waiting period.

Waiting Period. Upon the filing of both the acquiring person's and the acquired person's Notification and Report Forms, the initial 30-day HSR waiting period will begin to run. Assuming both filings are accepted on August 18, 2023, the initial waiting period would expire at 11:59 p.m. Eastern Time on September 18, 2023 (the thirtieth calendar day following filing, accounting for the fact that the filing date itself is not counted), absent the issuance of a Request for Additional Information and Documentary Material (a "Second Request") by either the Federal Trade Commission or the Antitrust Division of the Department of Justice. In the event of a Second Request, the waiting period would be extended and would not expire until thirty (30) days after Halcyon has substantially complied with the Second Request.

Antitrust Risk Assessment. For a comprehensive analysis of the competitive landscape and potential areas of regulatory concern, I refer you to my Antitrust Risk Assessment Memorandum dated July 10, 2023, which was circulated to the deal team at that time. As noted in that memorandum, the principal area of competitive overlap — and the expected focus of regulatory scrutiny — is the U.S. market for silicon photonics transceiver modules for hyperscale data center interconnects, where the parties' combined market share is estimated at approximately 47%. The risk of a Second Request was assessed as significant in light of that combined share, and the memorandum outlined risk mitigation strategies, including the preparation of potential divestiture proposals. I recommend that the deal team continue to develop these contingency strategies in parallel with the filing.

Please do not hesitate to contact me with any questions or comments.

Respectfully,

Howard Bellamy

HART-SCOTT-RODINO PREMERGER NOTIFICATION AND REPORT FORM

This Notification and Report Form is filed pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a), and the rules promulgated thereunder by the Federal Trade Commission (16 C.F.R. Parts 801–803). This filing is made on behalf of Halcyon Semiconductor Aktiengesellschaft as the acquiring person.

Item 1 — Identification of Persons Filing Notification

1(a) — Ultimate Parent Entity of the Acquiring Person

The ultimate parent entity ("UPE") of the acquiring person is identified as follows:

Halcyon Semiconductor Aktiengesellschaft is the ultimate parent entity within the meaning of 16 C.F.R. § 801.1(a)(3). Halcyon is not controlled by any other entity. The shares of Halcyon are widely held and publicly traded on the Frankfurt Stock Exchange and, through an American Depositary Receipt program, on The Nasdaq Stock Market. No single shareholder holds 50% or more of the outstanding voting securities of Halcyon, and no entity holds the contractual power, presently exercisable, to designate 50% or more of the directors of Halcyon. Accordingly, Halcyon is its own ultimate parent entity.

1(b) — Acquiring Entity (if Different from UPE)

The entity that will directly acquire control of the acquired person through the merger transaction is:

Halcyon Acquisition Sub, Inc. is a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft. Merger Sub was incorporated in the State of Delaware on June 12, 2023, solely for the purpose of effectuating the reverse triangular merger with Vectris Photonics, Inc. contemplated by the Agreement and Plan of Merger dated August 10, 2023. Merger Sub has no operations, no employees, no assets (other than a nominal amount of cash contributed as initial capitalization), and no liabilities. In the reverse triangular merger, Merger Sub will merge with and into Vectris Photonics, Inc., with Vectris surviving as a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft. Following the merger, Merger Sub will cease to exist as a separate corporate entity.

1(c) — Person Designated to Receive Notices and Communications

All notices, communications, and correspondence from the Federal Trade Commission and the Antitrust Division of the Department of Justice in connection with this filing should be directed to:

Howard Bellamy Calderwood & Harkness LLP 1333 New Hampshire Avenue NW, Suite 700 Washington, DC 20036 Telephone: [to be completed]

Email: [to be completed]

Mr. Bellamy is authorized to receive all notices, communications, and correspondence on behalf of the acquiring person, Halcyon Semiconductor Aktiengesellschaft, in connection with this Notification and Report Form and all matters arising therefrom, including any Request for Additional Information and Documentary Material.

Item 2 — Identification of the Acquired Person

2(a) — Ultimate Parent Entity of the Acquired Person

The ultimate parent entity of the acquired person is identified as follows:

Vectris Photonics, Inc. is the ultimate parent entity of the acquired person within the meaning of 16 C.F.R. § 801.1(a)(3). While Vectris has a number of significant shareholders (identified below in Section 2(c)), no single shareholder or group of shareholders acting together holds 50% or more of the outstanding voting securities of Vectris, and no entity holds the contractual power, presently exercisable, to designate 50% or more of the directors of Vectris. Accordingly, Vectris Photonics, Inc. is its own ultimate parent entity.

2(b) — Acquired Entity (if Different from UPE)

The acquired entity is the same as the ultimate parent entity of the acquired person. Vectris Photonics, Inc. is not a subsidiary of any other entity. It is the direct target of the reverse triangular merger contemplated by the Merger Agreement. In the merger, 100% of the outstanding shares of Vectris common stock will be converted into the right to receive cash consideration, and Vectris will survive the merger as a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft.

2(c) — Significant Shareholders of the Acquired Person

Based on information provided by Vectris Photonics, Inc. and publicly available filings, the following persons or entities hold 5% or more of the outstanding voting securities of Vectris as of the date of this filing:

The aggregate ownership of all identified significant shareholders is 64.5%, with the remaining 35.5% constituting the public float. In the merger, all outstanding shares of Vectris common stock — including those held by each of the significant shareholders identified above — will be converted into the right to receive the per-share cash merger consideration of approximately $13.70 per share, subject to the terms and conditions of the Merger Agreement.

Item 3 — Description of the Transaction

3(a) — Type of Transaction

The proposed transaction is a reverse triangular merger to be effected under the Delaware General Corporation Law ("DGCL"). The transaction structure is as follows:

(i) Halcyon Semiconductor Aktiengesellschaft ("Halcyon") has formed Halcyon Acquisition Sub, Inc. ("Merger Sub"), a Delaware corporation and wholly owned subsidiary of Halcyon, solely for the purpose of effectuating the merger.

(ii) Pursuant to the Agreement and Plan of Merger dated August 10, 2023, among Halcyon, Merger Sub, and Vectris Photonics, Inc. ("Vectris"), Merger Sub will merge with and into Vectris, with Vectris surviving the merger as a wholly owned subsidiary of Halcyon (the "Merger").

(iii) At the effective time of the Merger, each share of Vectris common stock issued and outstanding immediately prior to the effective time (other than shares held by Vectris as treasury shares, shares held by Halcyon or Merger Sub, and shares held by stockholders who have properly demanded and perfected appraisal rights under Section 262 of the DGCL) will be converted into the right to receive the per-share merger consideration in cash, without interest.

(iv) Following the consummation of the Merger, Vectris will continue as a surviving corporation and wholly owned subsidiary of Halcyon, and the separate corporate existence of Merger Sub will cease.

The Merger is an acquisition of voting securities within the meaning of 16 C.F.R. § 801.2, as Halcyon will acquire 100% of the outstanding voting securities of Vectris as a result of the Merger (through the conversion of Merger Sub shares into shares of the surviving entity). The transaction is also an acquisition of assets within the meaning of 16 C.F.R. § 801.2, as Halcyon will acquire indirect control over all of Vectris's assets through the acquisition of 100% of Vectris's equity.

3(b) — Aggregate Consideration / Transaction Value

The aggregate consideration for the proposed transaction and the resulting transaction value are as follows:

The aggregate transaction value for purposes of the HSR Act is $800,000,000, representing the total amount of cash consideration to be paid to (or for the benefit of) Vectris stockholders and holders of in-the-money stock options and unvested restricted stock units in exchange for 100% of the outstanding equity of Vectris on a fully diluted basis. The per-share merger consideration of approximately $13.70 represents a premium of approximately 39.5% over the unaffected closing share price of Vectris common stock on May 19, 2023 (the last trading day prior to market rumors regarding the proposed transaction).

The consideration is payable entirely in cash. No stock, securities, or non-cash assets of Halcyon are being offered or exchanged as part of the Merger consideration.

3(c) — Sources of Financing

The acquisition will be financed from the following sources:

The commitment letter from Meridian Atlantic Bank, N.A. is attached as Exhibit B to this filing (or a summary thereof, as applicable). The financing is not subject to any marketing or syndication contingency. Halcyon has represented in the Merger Agreement that it has, and at the closing will have, sufficient funds to consummate the Merger and pay the aggregate merger consideration.

3(d) — Definitive Agreement

The definitive agreement governing the proposed transaction is the Agreement and Plan of Merger, dated as of August 10, 2023, by and among Halcyon Semiconductor Aktiengesellschaft, Halcyon Acquisition Sub, Inc., and Vectris Photonics, Inc. (the "Merger Agreement"). A full executed copy of the Merger Agreement is attached as Exhibit A to this filing.

The material terms of the Merger Agreement relevant to this Notification include the following:

(i) Indemnification. The Merger Agreement provides for indemnification of Halcyon by the former stockholders of Vectris (through an escrow mechanism) for breaches of representations, warranties, and covenants. The indemnification cap is $120,000,000, representing 15% of the aggregate deal value.

(ii) Escrow. An aggregate amount of $40,000,000 (representing 5% of the aggregate deal value) will be withheld from the merger consideration at closing and deposited into an escrow account held by Ironclad National Bank, N.A., as escrow agent, for a period of 18 months following the closing date. The escrow funds will serve as security for post-closing indemnification claims.

(iii) Reverse Break-Up Fee. In the event that the Merger Agreement is terminated under certain specified circumstances attributable to Halcyon's failure to consummate the transaction (including a failure to obtain required antitrust approvals under specified conditions), Halcyon will be required to pay Vectris a reverse break-up fee of $28,000,000, representing approximately 3.5% of the aggregate deal value.

(iv) Target Termination Fee. In the event that the Merger Agreement is terminated under certain specified circumstances attributable to Vectris (including acceptance of a superior proposal), Vectris will be required to pay Halcyon a termination fee of $24,000,000, representing approximately 3.0% of the aggregate deal value.

(v) Outside Date. The Merger Agreement provides for an outside date of March 10, 2024 (the "Outside Date"), after which either party may terminate the Merger Agreement if the closing has not occurred. The Outside Date is subject to one automatic 90-day extension, to June 10, 2024, if, as of the initial Outside Date, all conditions to closing have been satisfied or waived other than the condition relating to the receipt of required antitrust approvals. This automatic extension mechanism is designed to provide additional runway for completion of the regulatory review process.

(vi) Antitrust Termination Right. Pursuant to Section 8.1(d) of the Merger Agreement, either party may terminate the Merger Agreement if the required antitrust approvals (including HSR clearance) have not been obtained by the Outside Date (as extended, if applicable) and such failure is not attributable to a breach by the terminating party of its obligations under the Merger Agreement with respect to antitrust matters.

(vii) Non-Competition and Non-Solicitation. The Merger Agreement includes covenants by the founders of Vectris, including Dr. Anand Raghavan, not to compete with the business of Vectris or Halcyon and not to solicit employees, customers, or suppliers of Vectris or Halcyon for a period of 3 years following the closing of the Merger.

3(e) — Related Filings

In addition to this HSR filing, the following competition law filings are anticipated in connection with the proposed transaction:

(i) European Union — EU Merger Regulation (EUMR). A Form CO notification is expected to be filed with the Directorate-General for Competition of the European Commission on or about August 25, 2023. The European Commission has assigned Case Number M.11247 to this matter. The EUMR filing will address the competitive effects of the transaction in the European Economic Area, with particular focus on the co-packaged optics chiplet market, where the parties' combined EEA market share is estimated at approximately 38%.

(ii) Other Jurisdictions. Based on the filing thresholds analysis conducted by Calderwood & Harkness in conjunction with its international competition law network, no other foreign antitrust or merger control filings are expected to be required for this transaction. The transaction does not meet the filing thresholds in any other jurisdiction based on the parties' current revenue and asset profiles. This assessment will be reviewed and confirmed prior to closing.

Item 4 — Description of the Acquiring Person

4(a) — Business of the Acquiring Person

Halcyon Semiconductor Aktiengesellschaft is a leading designer and manufacturer of advanced analog and mixed-signal semiconductors, power management integrated circuits, and radio-frequency components. Headquartered in Munich, Germany, Halcyon serves a diversified global customer base spanning the automotive, industrial, telecommunications, and data center end markets.

Fabrication Facilities. Halcyon operates three semiconductor fabrication facilities:

(i) Munich, Germany — Halcyon's principal fabrication facility, specializing in advanced analog and mixed-signal semiconductor manufacturing on 200mm and 300mm wafer lines.

(ii) Dresden, Germany — A facility focused on power management integrated circuit production, leveraging advanced process nodes for automotive-grade and industrial-grade components.

(iii) Singapore — A facility dedicated to radio-frequency component manufacturing and, increasingly, silicon photonics transceiver module assembly and testing.

Executive Management and Governance. The principal officers and governance leaders of Halcyon are as follows:

Financial Summary (FY2022).

Silicon Photonics Operations. In addition to its core analog, mixed-signal, and RF businesses, Halcyon has developed a growing product line in silicon photonics transceiver modules. This product line, which is primarily manufactured and assembled at Halcyon's Singapore facility, is particularly relevant to the competitive overlap analysis set forth in Item 6 below. Halcyon's silicon photonics transceiver modules are sold to hyperscale data center operators and enterprise customers for use in high-speed optical interconnects. This product line represents a growing share of Halcyon's overall revenue and is classified under NAICS codes 334413 and 334290.

4(b) — NAICS Codes for Halcyon

The following NAICS codes are applicable to the business activities of Halcyon Semiconductor Aktiengesellschaft:

Halcyon's silicon photonics transceiver module design and manufacturing activities, which constitute the principal area of competitive overlap with Vectris Photonics, are classified under both NAICS 334413 (Semiconductor and Related Device Manufacturing) and NAICS 334290 (Other Communications Equipment Manufacturing). This dual classification reflects the fact that silicon photonics transceiver modules incorporate semiconductor fabrication processes and are used as communications equipment in data center interconnect applications.

4(c) — Revenue by NAICS Code (Halcyon, FY2022)

The following table sets forth the revenue of Halcyon Semiconductor Aktiengesellschaft attributable to each applicable NAICS code for the most recently completed fiscal year (FY2022), broken down by United States revenue and total worldwide revenue:

Competitive Overlap — Silicon Photonics Transceiver Modules. Based on Halcyon's internal estimates, Halcyon's U.S. revenue from silicon photonics transceiver modules corresponds to an approximate U.S. market share of 19%. This figure is relevant to the competitive overlap analysis set forth in Item 6 below, where it is combined with Vectris's estimated U.S. market share of approximately 28% to yield a combined U.S. market share of approximately 47%.

The detailed revenue breakdown by NAICS code is being compiled from Halcyon's internal financial records and segment reporting data. Final figures will be confirmed and inserted prior to filing.

Item 5 — Description of the Acquired Person

5(a) — Business of the Acquired Person

Vectris Photonics, Inc. is a fabless designer of silicon photonics transceivers and co-packaged optics chiplets for hyperscale data center interconnects. Founded by Dr. Anand Raghavan, Vectris has established itself as a leading innovator in the rapidly growing market for optical interconnect solutions that enable high-bandwidth, low-latency data transmission within and between hyperscale data centers.

Business Model. Vectris operates a fabless business model, meaning that it designs and develops silicon photonics transceivers and co-packaged optics chiplets but does not own or operate semiconductor fabrication facilities. Vectris outsources the manufacturing of its products to third-party foundries and contract manufacturers. This asset-light model allows Vectris to focus its resources on research and development, product design, and customer engagement.

Headquarters and Facilities. Vectris is headquartered at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134. Vectris also maintains design centers and engineering offices at additional locations.

Executive Management.

Employees. Vectris employs approximately 1,450 individuals, the majority of whom are engineers and technical personnel engaged in product design, research and development, and customer support.

intellectual Property. Vectris holds a substantial portfolio of intellectual property, including 187 issued United States patents and 43 pending United States patent applications. The patent portfolio covers core technologies in silicon photonics transceiver design, co-packaged optics integration, optical modulator architectures, and photonic integrated circuit fabrication techniques. This intellectual property portfolio is a significant strategic asset and constitutes an important component of the value being acquired in the proposed transaction.

Key Customers. Vectris's customer base includes three of the top five U.S. hyperscale cloud operators (by revenue). These customer relationships are governed by multi-year supply agreements and represent a substantial portion of Vectris's revenue. The identity and concentration of Vectris's customer relationships are commercially sensitive, and Vectris has requested confidential treatment of detailed customer-specific revenue information.

Financial Summary (FY2022).

Implied Valuation Multiples. Based on the aggregate transaction value of $800,000,000 and Vectris's FY2022 financial results, the implied valuation multiples are as follows:

5(b) — NAICS Codes for Vectris

The following NAICS codes are applicable to the business activities of Vectris Photonics, Inc.:

5(c) — Revenue by NAICS Code (Vectris, FY2022)

The following table sets forth the revenue of Vectris Photonics, Inc. attributable to each applicable NAICS code for the most recently completed fiscal year (FY2022):

Vectris's revenue is predominantly U.S.-based, reflecting its concentration among U.S. hyperscale cloud operators. However, Vectris also generates some international revenue from sales to European cloud operators, which is relevant to the European Economic Area market share analysis to be presented in the EUMR Form CO notification (European Commission Case M.11247).

Competitive Overlap — Silicon Photonics Transceiver Modules. Based on Vectris's internal estimates, Vectris's U.S. revenue from silicon photonics transceiver modules corresponds to an approximate U.S. market share of 28%. When combined with Halcyon's estimated U.S. market share of approximately 19%, the combined U.S. market share is approximately 47%.

The detailed revenue breakdown by NAICS code is being compiled from Vectris's financial records in coordination with Vectris's counsel at Whitfield, Prager & Loomis LLP. Final figures will be confirmed and inserted prior to filing.

Item 6 — Identification of Overlapping Products and Markets

6(a) — Overlapping Product Markets

The following product markets have been identified as areas where the business activities of the acquiring person (Halcyon) and the acquired person (Vectris) overlap:

1. Silicon Photonics Transceiver Modules for Hyperscale Data Center Interconnects

Both Halcyon Semiconductor Aktiengesellschaft and Vectris Photonics, Inc. design and sell silicon photonics transceiver modules used in hyperscale data center interconnects. These modules are high-speed optical transceiver components that utilize silicon photonics technology to transmit data over optical fiber links within and between hyperscale data centers. The relevant NAICS codes for this product market are 334413 (Semiconductor and Related Device Manufacturing) and 334290 (Other Communications Equipment Manufacturing).

This is the principal overlap market and the expected primary focus of regulatory scrutiny by the FTC and/or the Antitrust Division. The parties' combined U.S. market share in this product market is estimated at approximately 47%, comprising Halcyon's share of approximately 19% and Vectris's share of approximately 28%. This combined share is well above the thresholds that typically attract heightened antitrust scrutiny and, as discussed in Calderwood & Harkness's Antitrust Risk Assessment Memorandum dated July 10, 2023, creates a significant risk that one or both of the reviewing agencies will issue a Second Request for additional information and documentary material.

Key competitors in the U.S. silicon photonics transceiver module market include established semiconductor companies and specialized photonics firms. Nevertheless, the post-merger entity would be the largest supplier in this market by a significant margin, which is expected to be a central concern in the regulatory review.

2. Co-Packaged Optics (CPO) Chiplets for Data Center Interconnects

Both Halcyon and Vectris are developing next-generation co-packaged optics chiplets, which integrate optical transceiver functionality directly onto or adjacent to network switch ASICs. CPO chiplets represent a significant evolution in data center interconnect technology and are expected to be a major growth market in the coming years. The relevant NAICS codes for this product market are 334413 and 334290.

The CPO chiplet market is particularly relevant to the European market, where the parties' combined EEA market share is estimated at approximately 38%. The competitive dynamics of this market will be addressed in greater detail in the EUMR Form CO notification (European Commission Case M.11247). The U.S. CPO market is more nascent and fragmented, and the combined U.S. share is lower than in the silicon photonics transceiver module market. However, the CPO market is likely to receive some degree of attention in the U.S. regulatory review as a forward-looking competitive concern.

6(b) — Geographic Markets

The following geographic markets have been identified as areas where the competitive overlap between Halcyon and Vectris is most significant:

United States. The United States is the primary geographic market for the competitive overlap analysis. The United States is the largest market globally for hyperscale data center interconnect components, driven by the concentration of major hyperscale cloud operators (Ridgeway Industries, Crestline Systems, Northgate Corporation, Meta, and Ridgeline Industries) in the United States. The parties' combined U.S. market share in silicon photonics transceiver modules is approximately 47%, making the United States the jurisdiction where competitive concerns are most acute.

European Economic Area (EEA). The European Economic Area is a secondary but important geographic market for the competitive overlap analysis. The parties' combined EEA market share in co-packaged optics chiplets is estimated at approximately 38%. The EEA market for silicon photonics transceiver modules is also relevant, though smaller in absolute terms than the U.S. market. The competitive effects of the transaction in the EEA will be addressed in detail in the EUMR Form CO notification (European Commission Case M.11247), which is expected to be filed on or about August 25, 2023.

Global. Both Halcyon and Vectris sell their products worldwide. In addition to the United States and the EEA, both parties have customers in the Asia-Pacific region (including Japan, South Korea, and China) and other markets. However, the U.S. and EEA are the geographic markets where the competitive overlap is most significant and where regulatory review is most likely to focus.

6(c) — NAICS Code Overlap Table

The following table summarizes the overlapping 6-digit NAICS codes, the revenue attributable to each party in the most recent fiscal year (FY2022), and the estimated combined market share in the relevant geographic markets:

The market share estimates set forth above are based on the parties' internal estimates and are subject to refinement based on third-party market data and industry reports. The market share figures for the silicon photonics transceiver module segment within NAICS 334413/334290 are the most relevant to the competitive overlap analysis and are the figures most likely to be scrutinized by the reviewing agency.

6(d) — Cross-Reference to Antitrust Risk Assessment

For a comprehensive analysis of the competitive landscape, market definition, potential theories of harm, and recommended risk mitigation strategies, reference is made to Calderwood & Harkness's Antitrust Risk Assessment Memorandum dated July 10, 2023, prepared by Howard Bellamy. That memorandum, which was prepared under the protection of the attorney-client privilege and the work product doctrine, identified the U.S. silicon photonics transceiver module market as the area of highest antitrust risk and recommended risk mitigation strategies including, among other things, the preparation of potential divestiture proposals for use in the event that the reviewing agency raises substantive competitive concerns. The conclusions and recommendations of that memorandum remain current and should inform the deal team's approach to the regulatory review process.

Item 7 — Prior Acquisitions

This Item requires the identification and description of any acquisitions by the acquiring person (Halcyon Semiconductor Aktiengesellschaft or any entity controlled by Halcyon) and the acquired person (Vectris Photonics, Inc. or any entity controlled by Vectris) in the relevant NAICS codes (334413, 334290, and 334419) during the five-year period preceding the date of this filing (i.e., from August 18, 2018 to the present).

Acquiring Person (Halcyon): Information regarding acquisitions by Halcyon and its controlled entities in the relevant NAICS codes during the preceding five years is being compiled from Halcyon's corporate development records. Any responsive acquisitions will be identified and described in this Item prior to filing.

[To be completed based on Halcyon records.]

Acquired Person (Vectris): Information regarding acquisitions by Vectris and its controlled entities in the relevant NAICS codes during the preceding five years is being compiled from Vectris's corporate records, in coordination with Vectris's counsel at Whitfield, Prager & Loomis LLP. Any responsive acquisitions will be identified and described in this Item prior to filing.

[To be completed based on Vectris records.]

Item 8 — Minority-Held Entities

This Item requires the identification of any entities engaged in the relevant product and geographic markets (as identified in Item 6) in which the acquiring person (Halcyon) or the acquired person (Vectris) holds a minority interest of 5% or more of the outstanding voting securities.

Acquiring Person (Halcyon): Information regarding minority interests held by Halcyon and its controlled entities in entities operating in the relevant product and geographic markets is being compiled from Halcyon's investment portfolio records and corporate development records. Any responsive minority interests will be identified and described in this Item prior to filing.

[To be completed based on review of Halcyon investment portfolios.]

Acquired Person (Vectris): Information regarding minority interests held by Vectris in entities operating in the relevant product and geographic markets is being compiled from Vectris's financial records, in coordination with Vectris's counsel at Whitfield, Prager & Loomis LLP. Any responsive minority interests will be identified and described in this Item prior to filing.

[To be completed based on review of Vectris investment portfolios.]

Exhibits and Attachments

The following exhibits and attachments are or will be appended to this Notification and Report Form:

Exhibit A — Agreement and Plan of Merger (August 10, 2023)

A full executed copy of the Agreement and Plan of Merger, dated as of August 10, 2023, by and among Halcyon Semiconductor Aktiengesellschaft, Halcyon Acquisition Sub, Inc., and Vectris Photonics, Inc., together with all schedules, exhibits, and disclosure schedules thereto, is attached hereto as Exhibit A. This is the definitive agreement governing the proposed transaction as described in Item 3.

Exhibit B — Commitment Letter — Meridian Atlantic Bank, N.A. (August 8, 2023)

A copy (or, if applicable, a redacted copy with commercially sensitive terms redacted) of the commitment letter from Meridian Atlantic Bank, N.A., dated August 8, 2023, evidencing Meridian Atlantic's commitment to provide a $500,000,000 senior secured term loan facility to Halcyon Semiconductor Aktiengesellschaft for purposes of financing the proposed acquisition, is attached hereto as Exhibit B. A summary of the principal terms of the commitment letter is as follows:

Exhibit C — Organizational Chart

Attached hereto as Exhibit C is an organizational chart depicting the corporate structure of the acquiring person before and after the proposed transaction, as follows:

Pre-Merger Structure:

Halcyon Semiconductor Aktiengesellschaft (UPE, Germany)

↓ 100% ownership

Halcyon Acquisition Sub, Inc. (Merger Sub, Delaware)

Vectris Photonics, Inc. (Target, Delaware) — independent entity

Post-Merger Structure:

Halcyon Semiconductor Aktiengesellschaft (UPE, Germany)

↓ 100% ownership

Vectris Photonics, Inc. (Surviving Entity, Delaware — wholly owned subsidiary of Halcyon)

Following the consummation of the reverse triangular merger, Halcyon Acquisition Sub, Inc. will have merged with and into Vectris Photonics, Inc. and will have ceased to exist as a separate entity. Vectris Photonics, Inc. will survive as a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft.

Exhibit D — Annual Reports / Financial Statements

The following audited financial statements are attached hereto as Exhibit D:

(i) Halcyon Semiconductor Aktiengesellschaft — Audited Consolidated Financial Statements (FY2022)

The audited consolidated financial statements of Halcyon Semiconductor Aktiengesellschaft for the fiscal year ended December 31, 2022, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and audited by Thornbury Wight LLP (engagement partner: Gavin Ashmore), are attached as Exhibit D-1.

(ii) Vectris Photonics, Inc. — Audited Financial Statements (FY2022)

The audited financial statements of Vectris Photonics, Inc. for the fiscal year ended December 31, 2022, prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), and audited by Linden Ross & Co., LLP (engagement partner: Christine Park), are attached as Exhibit D-2.

Exhibit E — 4(c) and 4(d) Documents

Pursuant to Item 4(c) and Item 4(d) of the HSR Notification and Report Form, the filing person is required to submit copies of all studies, surveys, analyses, and reports that were prepared by or for any officer(s) or director(s) of the acquiring person (or, in the case of an unincorporated entity, individuals exercising similar functions) for the purpose of evaluating or analyzing the acquisition with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets.

The identification and collection of responsive 4(c) and 4(d) documents is currently underway. Calderwood & Harkness is coordinating with Dr. Luisa Hartmann, General Counsel of Halcyon, to collect and review documents from Halcyon's board of directors (Vorstand and Aufsichtsrat) and senior management files that may be responsive to this Item. Responsive documents are expected to include, among other things, board presentations, strategic planning materials, competitive analyses, and internal memoranda relating to the proposed acquisition and the silicon photonics transceiver module market.

All responsive documents will be assembled, reviewed for privilege, Bates-numbered, and attached as Exhibit E prior to filing.

Filing Fee Calculation

The filing fee for this Notification and Report Form has been calculated in accordance with the HSR Act filing fee schedule, as amended by the Merger Filing Fee Modernization Act of 2022 and as adjusted by the FTC for fiscal year 2023.

The filing fee of $250,000 is payable by the acquiring person, Halcyon Semiconductor Aktiengesellschaft. Payment is to be made by wire transfer to the Federal Trade Commission Premerger Notification Office. Halcyon's Chief Financial Officer, Markus Ellinger, has been notified of the filing fee amount and has been requested to arrange for wire transfer payment in advance of the anticipated filing date of August 18, 2023. Confirmation of wire transfer completion should be provided to Howard Bellamy at Calderwood & Harkness upon execution.

Note: The precise filing fee amount is subject to confirmation against the fee schedule in effect on the date of filing. The fee schedule may be adjusted annually. The fee bracket and amount set forth above reflect Calderwood & Harkness's understanding of the currently applicable fee schedule and should be verified prior to filing.

Certification

I hereby certify that the information contained in this Notification and Report Form, and all exhibits and attachments hereto, is true, correct, and complete to the best of my knowledge and belief, formed after reasonable inquiry. I further certify that I am authorized to file this Notification and Report Form on behalf of the filing person, Halcyon Semiconductor Aktiengesellschaft.

This Notification and Report Form is filed pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a, and the rules promulgated thereunder at 16 C.F.R. Parts 801–803, on behalf of Halcyon Semiconductor Aktiengesellschaft, as the acquiring person, in connection with the proposed acquisition of Vectris Photonics, Inc.

HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT (Acquiring Person)

By its authorized representative:

By: ________

Name: Howard Bellamy

Title: Specialist Partner, Antitrust & Competition, Calderwood & Harkness LLP

Authorized Representative of Halcyon Semiconductor Aktiengesellschaft

Date: August 18, 2023

INTERNAL DRAFTING NOTES AND OPEN ITEMS

ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL — INTERNAL WORK PRODUCT — NOT FOR FILING

The following is a checklist of open items requiring completion, confirmation, or resolution prior to finalization and filing of this Notification and Report Form on August 18, 2023. All items should be resolved by close of business on August 17, 2023, unless otherwise indicated.

Checklist of Open Items

Anticipated Regulatory Timeline

The following is the anticipated regulatory timeline for the HSR review:

• Filing Date (anticipated): August 18, 2023

• Commencement of Initial 30-Day Waiting Period: August 18, 2023 (upon acceptance of both filings)

• Expiration of Initial 30-Day Waiting Period: September 18, 2023 (absent a Second Request)

• Second Request Risk: Assessed as significant given the combined U.S. market share of approximately 47% in silicon photonics transceiver modules, per Calderwood & Harkness's Antitrust Risk Assessment Memorandum dated July 10, 2023. The likelihood of a Second Request is substantially elevated by the concentration in the overlap market and the parties' status as the two leading U.S. competitors in that market.

• If Second Request is issued: The waiting period will be extended and will not expire until 30 days after Halcyon has substantially complied with the Second Request. Compliance typically requires several months of document production and preparation of interrogatory responses.

• EUMR Form CO Filing (anticipated): On or about August 25, 2023 (European Commission Case M.11247)

Merger Agreement Timeline Provisions

The Merger Agreement provides the following timeline protections relevant to the regulatory review:

• Outside Date: March 10, 2024

ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL
DRAFT — HART-SCOTT-RODINO PREMERGER NOTIFICATION AND REPORT FORM
Prepared for Filing by Halcyon Semiconductor Aktiengesellschaft (Acquiring Person)
Prepared by: Howard Bellamy Specialist Partner, Antitrust & Competition Calderwood & Harkness LLP 1333 New Hampshire Avenue NW, Suite 700 Washington, DC 20036
Date of Preparation: August 16, 2023 Anticipated Filing Date: August 18, 2023
Filed with: Federal Trade Commission, Premerger Notification Office and Antitrust Division, United States Department of Justice
Calderwood & Harkness Engagement Number: 1032-00005
DRAFT — FOR INTERNAL REVIEW AND COMMENT PRIOR TO FILING ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL
Contact Information for Filing Counsel:
Howard Bellamy Calderwood & Harkness LLP 1333 New Hampshire Avenue NW, Suite 700 Washington, DC 20036 Telephone: [to be completed]
Email: [to be completed]
TRANSMITTAL MEMORANDUM
MEMORANDUM
ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL
Dear Luisa and Oliver:
Enclosed for your review and comment is the draft Hart-Scott-Rodino Premerger Notification and Report Form (the "HSR Form" or "Notification") to be filed on behalf of Halcyon Semiconductor Aktiengesellschaft ("Halcyon") in connection with the proposed acquisition of Vectris Photonics, Inc. ("Vectris") pursuant to the Agreement and Plan of Merger dated August 10, 2023 (the "Merger Agreement").
Filing Fee. The filing fee for this transaction has been calculated based on the aggregate transaction value of $800,000,000. Under the current HSR filing fee schedule, this transaction falls within the applicable fee bracket, and the precise fee amount is set forth in the Filing Fee Calculation section of this draft. I would ask that Halcyon's treasury department — specifically Markus Ellinger, CFO — arrange for payment of the filing fee by wire transfer to the FTC Premerger Notification Office in advance of the anticipated August 18, 2023 filing date. Wire transfer instructions are set forth in the Filing Fee Calculation section below. Timely receipt of the filing fee by the FTC is a prerequisite to acceptance of the Notification, and accordingly, I would recommend that the wire transfer be initiated no later than the morning of August 17, 2023, to allow for settlement prior to filing.
Request for Comments. I respectfully request that all comments on this draft be provided to me by close of business on Thursday, August 17, 2023, to permit finalization and filing on Friday, August 18, 2023. Any comments may be directed to me by email or telephone. Oliver, I would also appreciate your review of the transaction description in Item 3 and the financing summary in Item 3(c) to ensure consistency with the final Merger Agreement and the Meridian Atlantic Bank commitment letter.
Vectris Parallel Filing. Vectris Photonics, Inc. will make its own HSR filing through Whitfield, Prager & Loomis LLP. Catherine Whitfield and Douglas Prager are serving as Vectris's antitrust counsel for purposes of this filing. I have been in regular coordination with Douglas Prager regarding the timing and substance of Vectris's parallel filing, and it is our mutual expectation that both filings will be made on the same date — August 18, 2023. Both filings must be received by the agencies before the initial 30-day waiting period commences. I will continue to coordinate with Whitfield, Prager & Loomis on any substantive questions that arise during the waiting period.
Waiting Period. Upon the filing of both the acquiring person's and the acquired person's Notification and Report Forms, the initial 30-day HSR waiting period will begin to run. Assuming both filings are accepted on August 18, 2023, the initial waiting period would expire at 11:59 p.m. Eastern Time on September 18, 2023 (the thirtieth calendar day following filing, accounting for the fact that the filing date itself is not counted), absent the issuance of a Request for Additional Information and Documentary Material (a "Second Request") by either the Federal Trade Commission or the Antitrust Division of the Department of Justice. In the event of a Second Request, the waiting period would be extended and would not expire until thirty (30) days after Halcyon has substantially complied with the Second Request.
Antitrust Risk Assessment. For a comprehensive analysis of the competitive landscape and potential areas of regulatory concern, I refer you to my Antitrust Risk Assessment Memorandum dated July 10, 2023, which was circulated to the deal team at that time. As noted in that memorandum, the principal area of competitive overlap — and the expected focus of regulatory scrutiny — is the U.S. market for silicon photonics transceiver modules for hyperscale data center interconnects, where the parties' combined market share is estimated at approximately 47%. The risk of a Second Request was assessed as significant in light of that combined share, and the memorandum outlined risk mitigation strategies, including the preparation of potential divestiture proposals. I recommend that the deal team continue to develop these contingency strategies in parallel with the filing.
Please do not hesitate to contact me with any questions or comments.
Respectfully,
Howard Bellamy
HART-SCOTT-RODINO PREMERGER NOTIFICATION AND REPORT FORM
This Notification and Report Form is filed pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (15 U.S.C. § 18a), and the rules promulgated thereunder by the Federal Trade Commission (16 C.F.R. Parts 801–803). This filing is made on behalf of Halcyon Semiconductor Aktiengesellschaft as the acquiring person.
Item 1 — Identification of Persons Filing Notification
1(a) — Ultimate Parent Entity of the Acquiring Person
The ultimate parent entity ("UPE") of the acquiring person is identified as follows:
Halcyon Semiconductor Aktiengesellschaft is the ultimate parent entity within the meaning of 16 C.F.R. § 801.1(a)(3). Halcyon is not controlled by any other entity. The shares of Halcyon are widely held and publicly traded on the Frankfurt Stock Exchange and, through an American Depositary Receipt program, on The Nasdaq Stock Market. No single shareholder holds 50% or more of the outstanding voting securities of Halcyon, and no entity holds the contractual power, presently exercisable, to designate 50% or more of the directors of Halcyon. Accordingly, Halcyon is its own ultimate parent entity.
1(b) — Acquiring Entity (if Different from UPE)
The entity that will directly acquire control of the acquired person through the merger transaction is:
Halcyon Acquisition Sub, Inc. is a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft. Merger Sub was incorporated in the State of Delaware on June 12, 2023, solely for the purpose of effectuating the reverse triangular merger with Vectris Photonics, Inc. contemplated by the Agreement and Plan of Merger dated August 10, 2023. Merger Sub has no operations, no employees, no assets (other than a nominal amount of cash contributed as initial capitalization), and no liabilities. In the reverse triangular merger, Merger Sub will merge with and into Vectris Photonics, Inc., with Vectris surviving as a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft. Following the merger, Merger Sub will cease to exist as a separate corporate entity.
1(c) — Person Designated to Receive Notices and Communications
All notices, communications, and correspondence from the Federal Trade Commission and the Antitrust Division of the Department of Justice in connection with this filing should be directed to:
Howard Bellamy Calderwood & Harkness LLP 1333 New Hampshire Avenue NW, Suite 700 Washington, DC 20036 Telephone: [to be completed]
Email: [to be completed]
Mr. Bellamy is authorized to receive all notices, communications, and correspondence on behalf of the acquiring person, Halcyon Semiconductor Aktiengesellschaft, in connection with this Notification and Report Form and all matters arising therefrom, including any Request for Additional Information and Documentary Material.
Item 2 — Identification of the Acquired Person
2(a) — Ultimate Parent Entity of the Acquired Person
The ultimate parent entity of the acquired person is identified as follows:
Vectris Photonics, Inc. is the ultimate parent entity of the acquired person within the meaning of 16 C.F.R. § 801.1(a)(3). While Vectris has a number of significant shareholders (identified below in Section 2(c)), no single shareholder or group of shareholders acting together holds 50% or more of the outstanding voting securities of Vectris, and no entity holds the contractual power, presently exercisable, to designate 50% or more of the directors of Vectris. Accordingly, Vectris Photonics, Inc. is its own ultimate parent entity.
2(b) — Acquired Entity (if Different from UPE)
The acquired entity is the same as the ultimate parent entity of the acquired person. Vectris Photonics, Inc. is not a subsidiary of any other entity. It is the direct target of the reverse triangular merger contemplated by the Merger Agreement. In the merger, 100% of the outstanding shares of Vectris common stock will be converted into the right to receive cash consideration, and Vectris will survive the merger as a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft.
2(c) — Significant Shareholders of the Acquired Person
Based on information provided by Vectris Photonics, Inc. and publicly available filings, the following persons or entities hold 5% or more of the outstanding voting securities of Vectris as of the date of this filing:
The aggregate ownership of all identified significant shareholders is 64.5%, with the remaining 35.5% constituting the public float. In the merger, all outstanding shares of Vectris common stock — including those held by each of the significant shareholders identified above — will be converted into the right to receive the per-share cash merger consideration of approximately $13.70 per share, subject to the terms and conditions of the Merger Agreement.
Item 3 — Description of the Transaction
3(a) — Type of Transaction
The proposed transaction is a reverse triangular merger to be effected under the Delaware General Corporation Law ("DGCL"). The transaction structure is as follows:
(i) Halcyon Semiconductor Aktiengesellschaft ("Halcyon") has formed Halcyon Acquisition Sub, Inc. ("Merger Sub"), a Delaware corporation and wholly owned subsidiary of Halcyon, solely for the purpose of effectuating the merger.
(ii) Pursuant to the Agreement and Plan of Merger dated August 10, 2023, among Halcyon, Merger Sub, and Vectris Photonics, Inc. ("Vectris"), Merger Sub will merge with and into Vectris, with Vectris surviving the merger as a wholly owned subsidiary of Halcyon (the "Merger").
(iii) At the effective time of the Merger, each share of Vectris common stock issued and outstanding immediately prior to the effective time (other than shares held by Vectris as treasury shares, shares held by Halcyon or Merger Sub, and shares held by stockholders who have properly demanded and perfected appraisal rights under Section 262 of the DGCL) will be converted into the right to receive the per-share merger consideration in cash, without interest.
(iv) Following the consummation of the Merger, Vectris will continue as a surviving corporation and wholly owned subsidiary of Halcyon, and the separate corporate existence of Merger Sub will cease.
The Merger is an acquisition of voting securities within the meaning of 16 C.F.R. § 801.2, as Halcyon will acquire 100% of the outstanding voting securities of Vectris as a result of the Merger (through the conversion of Merger Sub shares into shares of the surviving entity). The transaction is also an acquisition of assets within the meaning of 16 C.F.R. § 801.2, as Halcyon will acquire indirect control over all of Vectris's assets through the acquisition of 100% of Vectris's equity.
3(b) — Aggregate Consideration / Transaction Value
The aggregate consideration for the proposed transaction and the resulting transaction value are as follows:
The aggregate transaction value for purposes of the HSR Act is $800,000,000, representing the total amount of cash consideration to be paid to (or for the benefit of) Vectris stockholders and holders of in-the-money stock options and unvested restricted stock units in exchange for 100% of the outstanding equity of Vectris on a fully diluted basis. The per-share merger consideration of approximately $13.70 represents a premium of approximately 39.5% over the unaffected closing share price of Vectris common stock on May 19, 2023 (the last trading day prior to market rumors regarding the proposed transaction).
The consideration is payable entirely in cash. No stock, securities, or non-cash assets of Halcyon are being offered or exchanged as part of the Merger consideration.
3(c) — Sources of Financing
The acquisition will be financed from the following sources:
The commitment letter from Meridian Atlantic Bank, N.A. is attached as Exhibit B to this filing (or a summary thereof, as applicable). The financing is not subject to any marketing or syndication contingency. Halcyon has represented in the Merger Agreement that it has, and at the closing will have, sufficient funds to consummate the Merger and pay the aggregate merger consideration.
3(d) — Definitive Agreement
The definitive agreement governing the proposed transaction is the Agreement and Plan of Merger, dated as of August 10, 2023, by and among Halcyon Semiconductor Aktiengesellschaft, Halcyon Acquisition Sub, Inc., and Vectris Photonics, Inc. (the "Merger Agreement"). A full executed copy of the Merger Agreement is attached as Exhibit A to this filing.
The material terms of the Merger Agreement relevant to this Notification include the following:
(i) Indemnification. The Merger Agreement provides for indemnification of Halcyon by the former stockholders of Vectris (through an escrow mechanism) for breaches of representations, warranties, and covenants. The indemnification cap is $120,000,000, representing 15% of the aggregate deal value.
(ii) Escrow. An aggregate amount of $40,000,000 (representing 5% of the aggregate deal value) will be withheld from the merger consideration at closing and deposited into an escrow account held by Ironclad National Bank, N.A., as escrow agent, for a period of 18 months following the closing date. The escrow funds will serve as security for post-closing indemnification claims.
(iii) Reverse Break-Up Fee. In the event that the Merger Agreement is terminated under certain specified circumstances attributable to Halcyon's failure to consummate the transaction (including a failure to obtain required antitrust approvals under specified conditions), Halcyon will be required to pay Vectris a reverse break-up fee of $28,000,000, representing approximately 3.5% of the aggregate deal value.
(iv) Target Termination Fee. In the event that the Merger Agreement is terminated under certain specified circumstances attributable to Vectris (including acceptance of a superior proposal), Vectris will be required to pay Halcyon a termination fee of $24,000,000, representing approximately 3.0% of the aggregate deal value.
(v) Outside Date. The Merger Agreement provides for an outside date of March 10, 2024 (the "Outside Date"), after which either party may terminate the Merger Agreement if the closing has not occurred. The Outside Date is subject to one automatic 90-day extension, to June 10, 2024, if, as of the initial Outside Date, all conditions to closing have been satisfied or waived other than the condition relating to the receipt of required antitrust approvals. This automatic extension mechanism is designed to provide additional runway for completion of the regulatory review process.
(vi) Antitrust Termination Right. Pursuant to Section 8.1(d) of the Merger Agreement, either party may terminate the Merger Agreement if the required antitrust approvals (including HSR clearance) have not been obtained by the Outside Date (as extended, if applicable) and such failure is not attributable to a breach by the terminating party of its obligations under the Merger Agreement with respect to antitrust matters.
(vii) Non-Competition and Non-Solicitation. The Merger Agreement includes covenants by the founders of Vectris, including Dr. Anand Raghavan, not to compete with the business of Vectris or Halcyon and not to solicit employees, customers, or suppliers of Vectris or Halcyon for a period of 3 years following the closing of the Merger.
3(e) — Related Filings
In addition to this HSR filing, the following competition law filings are anticipated in connection with the proposed transaction:
(i) European Union — EU Merger Regulation (EUMR). A Form CO notification is expected to be filed with the Directorate-General for Competition of the European Commission on or about August 25, 2023. The European Commission has assigned Case Number M.11247 to this matter. The EUMR filing will address the competitive effects of the transaction in the European Economic Area, with particular focus on the co-packaged optics chiplet market, where the parties' combined EEA market share is estimated at approximately 38%.
(ii) Other Jurisdictions. Based on the filing thresholds analysis conducted by Calderwood & Harkness in conjunction with its international competition law network, no other foreign antitrust or merger control filings are expected to be required for this transaction. The transaction does not meet the filing thresholds in any other jurisdiction based on the parties' current revenue and asset profiles. This assessment will be reviewed and confirmed prior to closing.
Item 4 — Description of the Acquiring Person
4(a) — Business of the Acquiring Person
Halcyon Semiconductor Aktiengesellschaft is a leading designer and manufacturer of advanced analog and mixed-signal semiconductors, power management integrated circuits, and radio-frequency components. Headquartered in Munich, Germany, Halcyon serves a diversified global customer base spanning the automotive, industrial, telecommunications, and data center end markets.
Fabrication Facilities. Halcyon operates three semiconductor fabrication facilities:
(i) Munich, Germany — Halcyon's principal fabrication facility, specializing in advanced analog and mixed-signal semiconductor manufacturing on 200mm and 300mm wafer lines.
(ii) Dresden, Germany — A facility focused on power management integrated circuit production, leveraging advanced process nodes for automotive-grade and industrial-grade components.
(iii) Singapore — A facility dedicated to radio-frequency component manufacturing and, increasingly, silicon photonics transceiver module assembly and testing.
Executive Management and Governance. The principal officers and governance leaders of Halcyon are as follows:
Financial Summary (FY2022).
Silicon Photonics Operations. In addition to its core analog, mixed-signal, and RF businesses, Halcyon has developed a growing product line in silicon photonics transceiver modules. This product line, which is primarily manufactured and assembled at Halcyon's Singapore facility, is particularly relevant to the competitive overlap analysis set forth in Item 6 below. Halcyon's silicon photonics transceiver modules are sold to hyperscale data center operators and enterprise customers for use in high-speed optical interconnects. This product line represents a growing share of Halcyon's overall revenue and is classified under NAICS codes 334413 and 334290.
4(b) — NAICS Codes for Halcyon
The following NAICS codes are applicable to the business activities of Halcyon Semiconductor Aktiengesellschaft:
Halcyon's silicon photonics transceiver module design and manufacturing activities, which constitute the principal area of competitive overlap with Vectris Photonics, are classified under both NAICS 334413 (Semiconductor and Related Device Manufacturing) and NAICS 334290 (Other Communications Equipment Manufacturing). This dual classification reflects the fact that silicon photonics transceiver modules incorporate semiconductor fabrication processes and are used as communications equipment in data center interconnect applications.
4(c) — Revenue by NAICS Code (Halcyon, FY2022)
The following table sets forth the revenue of Halcyon Semiconductor Aktiengesellschaft attributable to each applicable NAICS code for the most recently completed fiscal year (FY2022), broken down by United States revenue and total worldwide revenue:
Competitive Overlap — Silicon Photonics Transceiver Modules. Based on Halcyon's internal estimates, Halcyon's U.S. revenue from silicon photonics transceiver modules corresponds to an approximate U.S. market share of 19%. This figure is relevant to the competitive overlap analysis set forth in Item 6 below, where it is combined with Vectris's estimated U.S. market share of approximately 28% to yield a combined U.S. market share of approximately 47%.
The detailed revenue breakdown by NAICS code is being compiled from Halcyon's internal financial records and segment reporting data. Final figures will be confirmed and inserted prior to filing.
Item 5 — Description of the Acquired Person
5(a) — Business of the Acquired Person
Vectris Photonics, Inc. is a fabless designer of silicon photonics transceivers and co-packaged optics chiplets for hyperscale data center interconnects. Founded by Dr. Anand Raghavan, Vectris has established itself as a leading innovator in the rapidly growing market for optical interconnect solutions that enable high-bandwidth, low-latency data transmission within and between hyperscale data centers.
Business Model. Vectris operates a fabless business model, meaning that it designs and develops silicon photonics transceivers and co-packaged optics chiplets but does not own or operate semiconductor fabrication facilities. Vectris outsources the manufacturing of its products to third-party foundries and contract manufacturers. This asset-light model allows Vectris to focus its resources on research and development, product design, and customer engagement.
Headquarters and Facilities. Vectris is headquartered at 4750 Ridgepoint Drive, Suite 300, San Jose, California 95134. Vectris also maintains design centers and engineering offices at additional locations.
Executive Management.
Employees. Vectris employs approximately 1,450 individuals, the majority of whom are engineers and technical personnel engaged in product design, research and development, and customer support.
intellectual Property. Vectris holds a substantial portfolio of intellectual property, including 187 issued United States patents and 43 pending United States patent applications. The patent portfolio covers core technologies in silicon photonics transceiver design, co-packaged optics integration, optical modulator architectures, and photonic integrated circuit fabrication techniques. This intellectual property portfolio is a significant strategic asset and constitutes an important component of the value being acquired in the proposed transaction.
Key Customers. Vectris's customer base includes three of the top five U.S. hyperscale cloud operators (by revenue). These customer relationships are governed by multi-year supply agreements and represent a substantial portion of Vectris's revenue. The identity and concentration of Vectris's customer relationships are commercially sensitive, and Vectris has requested confidential treatment of detailed customer-specific revenue information.
Financial Summary (FY2022).
Implied Valuation Multiples. Based on the aggregate transaction value of $800,000,000 and Vectris's FY2022 financial results, the implied valuation multiples are as follows:
5(b) — NAICS Codes for Vectris
The following NAICS codes are applicable to the business activities of Vectris Photonics, Inc.:
5(c) — Revenue by NAICS Code (Vectris, FY2022)
The following table sets forth the revenue of Vectris Photonics, Inc. attributable to each applicable NAICS code for the most recently completed fiscal year (FY2022):
Vectris's revenue is predominantly U.S.-based, reflecting its concentration among U.S. hyperscale cloud operators. However, Vectris also generates some international revenue from sales to European cloud operators, which is relevant to the European Economic Area market share analysis to be presented in the EUMR Form CO notification (European Commission Case M.11247).
Competitive Overlap — Silicon Photonics Transceiver Modules. Based on Vectris's internal estimates, Vectris's U.S. revenue from silicon photonics transceiver modules corresponds to an approximate U.S. market share of 28%. When combined with Halcyon's estimated U.S. market share of approximately 19%, the combined U.S. market share is approximately 47%.
The detailed revenue breakdown by NAICS code is being compiled from Vectris's financial records in coordination with Vectris's counsel at Whitfield, Prager & Loomis LLP. Final figures will be confirmed and inserted prior to filing.
Item 6 — Identification of Overlapping Products and Markets
6(a) — Overlapping Product Markets
The following product markets have been identified as areas where the business activities of the acquiring person (Halcyon) and the acquired person (Vectris) overlap:
1. Silicon Photonics Transceiver Modules for Hyperscale Data Center Interconnects
Both Halcyon Semiconductor Aktiengesellschaft and Vectris Photonics, Inc. design and sell silicon photonics transceiver modules used in hyperscale data center interconnects. These modules are high-speed optical transceiver components that utilize silicon photonics technology to transmit data over optical fiber links within and between hyperscale data centers. The relevant NAICS codes for this product market are 334413 (Semiconductor and Related Device Manufacturing) and 334290 (Other Communications Equipment Manufacturing).
This is the principal overlap market and the expected primary focus of regulatory scrutiny by the FTC and/or the Antitrust Division. The parties' combined U.S. market share in this product market is estimated at approximately 47%, comprising Halcyon's share of approximately 19% and Vectris's share of approximately 28%. This combined share is well above the thresholds that typically attract heightened antitrust scrutiny and, as discussed in Calderwood & Harkness's Antitrust Risk Assessment Memorandum dated July 10, 2023, creates a significant risk that one or both of the reviewing agencies will issue a Second Request for additional information and documentary material.
Key competitors in the U.S. silicon photonics transceiver module market include established semiconductor companies and specialized photonics firms. Nevertheless, the post-merger entity would be the largest supplier in this market by a significant margin, which is expected to be a central concern in the regulatory review.
2. Co-Packaged Optics (CPO) Chiplets for Data Center Interconnects
Both Halcyon and Vectris are developing next-generation co-packaged optics chiplets, which integrate optical transceiver functionality directly onto or adjacent to network switch ASICs. CPO chiplets represent a significant evolution in data center interconnect technology and are expected to be a major growth market in the coming years. The relevant NAICS codes for this product market are 334413 and 334290.
The CPO chiplet market is particularly relevant to the European market, where the parties' combined EEA market share is estimated at approximately 38%. The competitive dynamics of this market will be addressed in greater detail in the EUMR Form CO notification (European Commission Case M.11247). The U.S. CPO market is more nascent and fragmented, and the combined U.S. share is lower than in the silicon photonics transceiver module market. However, the CPO market is likely to receive some degree of attention in the U.S. regulatory review as a forward-looking competitive concern.
6(b) — Geographic Markets
The following geographic markets have been identified as areas where the competitive overlap between Halcyon and Vectris is most significant:
United States. The United States is the primary geographic market for the competitive overlap analysis. The United States is the largest market globally for hyperscale data center interconnect components, driven by the concentration of major hyperscale cloud operators (Ridgeway Industries, Crestline Systems, Northgate Corporation, Meta, and Ridgeline Industries) in the United States. The parties' combined U.S. market share in silicon photonics transceiver modules is approximately 47%, making the United States the jurisdiction where competitive concerns are most acute.
European Economic Area (EEA). The European Economic Area is a secondary but important geographic market for the competitive overlap analysis. The parties' combined EEA market share in co-packaged optics chiplets is estimated at approximately 38%. The EEA market for silicon photonics transceiver modules is also relevant, though smaller in absolute terms than the U.S. market. The competitive effects of the transaction in the EEA will be addressed in detail in the EUMR Form CO notification (European Commission Case M.11247), which is expected to be filed on or about August 25, 2023.
Global. Both Halcyon and Vectris sell their products worldwide. In addition to the United States and the EEA, both parties have customers in the Asia-Pacific region (including Japan, South Korea, and China) and other markets. However, the U.S. and EEA are the geographic markets where the competitive overlap is most significant and where regulatory review is most likely to focus.
6(c) — NAICS Code Overlap Table
The following table summarizes the overlapping 6-digit NAICS codes, the revenue attributable to each party in the most recent fiscal year (FY2022), and the estimated combined market share in the relevant geographic markets:
The market share estimates set forth above are based on the parties' internal estimates and are subject to refinement based on third-party market data and industry reports. The market share figures for the silicon photonics transceiver module segment within NAICS 334413/334290 are the most relevant to the competitive overlap analysis and are the figures most likely to be scrutinized by the reviewing agency.
6(d) — Cross-Reference to Antitrust Risk Assessment
For a comprehensive analysis of the competitive landscape, market definition, potential theories of harm, and recommended risk mitigation strategies, reference is made to Calderwood & Harkness's Antitrust Risk Assessment Memorandum dated July 10, 2023, prepared by Howard Bellamy. That memorandum, which was prepared under the protection of the attorney-client privilege and the work product doctrine, identified the U.S. silicon photonics transceiver module market as the area of highest antitrust risk and recommended risk mitigation strategies including, among other things, the preparation of potential divestiture proposals for use in the event that the reviewing agency raises substantive competitive concerns. The conclusions and recommendations of that memorandum remain current and should inform the deal team's approach to the regulatory review process.
Item 7 — Prior Acquisitions
This Item requires the identification and description of any acquisitions by the acquiring person (Halcyon Semiconductor Aktiengesellschaft or any entity controlled by Halcyon) and the acquired person (Vectris Photonics, Inc. or any entity controlled by Vectris) in the relevant NAICS codes (334413, 334290, and 334419) during the five-year period preceding the date of this filing (i.e., from August 18, 2018 to the present).
Acquiring Person (Halcyon): Information regarding acquisitions by Halcyon and its controlled entities in the relevant NAICS codes during the preceding five years is being compiled from Halcyon's corporate development records. Any responsive acquisitions will be identified and described in this Item prior to filing.
[To be completed based on Halcyon records.]
Acquired Person (Vectris): Information regarding acquisitions by Vectris and its controlled entities in the relevant NAICS codes during the preceding five years is being compiled from Vectris's corporate records, in coordination with Vectris's counsel at Whitfield, Prager & Loomis LLP. Any responsive acquisitions will be identified and described in this Item prior to filing.
[To be completed based on Vectris records.]
Item 8 — Minority-Held Entities
This Item requires the identification of any entities engaged in the relevant product and geographic markets (as identified in Item 6) in which the acquiring person (Halcyon) or the acquired person (Vectris) holds a minority interest of 5% or more of the outstanding voting securities.
Acquiring Person (Halcyon): Information regarding minority interests held by Halcyon and its controlled entities in entities operating in the relevant product and geographic markets is being compiled from Halcyon's investment portfolio records and corporate development records. Any responsive minority interests will be identified and described in this Item prior to filing.
[To be completed based on review of Halcyon investment portfolios.]
Acquired Person (Vectris): Information regarding minority interests held by Vectris in entities operating in the relevant product and geographic markets is being compiled from Vectris's financial records, in coordination with Vectris's counsel at Whitfield, Prager & Loomis LLP. Any responsive minority interests will be identified and described in this Item prior to filing.
[To be completed based on review of Vectris investment portfolios.]
Exhibits and Attachments
The following exhibits and attachments are or will be appended to this Notification and Report Form:
Exhibit A — Agreement and Plan of Merger (August 10, 2023)
A full executed copy of the Agreement and Plan of Merger, dated as of August 10, 2023, by and among Halcyon Semiconductor Aktiengesellschaft, Halcyon Acquisition Sub, Inc., and Vectris Photonics, Inc., together with all schedules, exhibits, and disclosure schedules thereto, is attached hereto as Exhibit A. This is the definitive agreement governing the proposed transaction as described in Item 3.
Exhibit B — Commitment Letter — Meridian Atlantic Bank, N.A. (August 8, 2023)
A copy (or, if applicable, a redacted copy with commercially sensitive terms redacted) of the commitment letter from Meridian Atlantic Bank, N.A., dated August 8, 2023, evidencing Meridian Atlantic's commitment to provide a $500,000,000 senior secured term loan facility to Halcyon Semiconductor Aktiengesellschaft for purposes of financing the proposed acquisition, is attached hereto as Exhibit B. A summary of the principal terms of the commitment letter is as follows:
Exhibit C — Organizational Chart
Attached hereto as Exhibit C is an organizational chart depicting the corporate structure of the acquiring person before and after the proposed transaction, as follows:
Pre-Merger Structure:
Halcyon Semiconductor Aktiengesellschaft (UPE, Germany)
↓ 100% ownership
Halcyon Acquisition Sub, Inc. (Merger Sub, Delaware)
Vectris Photonics, Inc. (Target, Delaware) — independent entity
Post-Merger Structure:
Halcyon Semiconductor Aktiengesellschaft (UPE, Germany)
↓ 100% ownership
Vectris Photonics, Inc. (Surviving Entity, Delaware — wholly owned subsidiary of Halcyon)
Following the consummation of the reverse triangular merger, Halcyon Acquisition Sub, Inc. will have merged with and into Vectris Photonics, Inc. and will have ceased to exist as a separate entity. Vectris Photonics, Inc. will survive as a wholly owned subsidiary of Halcyon Semiconductor Aktiengesellschaft.
Exhibit D — Annual Reports / Financial Statements
The following audited financial statements are attached hereto as Exhibit D:
(i) Halcyon Semiconductor Aktiengesellschaft — Audited Consolidated Financial Statements (FY2022)
The audited consolidated financial statements of Halcyon Semiconductor Aktiengesellschaft for the fiscal year ended December 31, 2022, prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and audited by Thornbury Wight LLP (engagement partner: Gavin Ashmore), are attached as Exhibit D-1.
(ii) Vectris Photonics, Inc. — Audited Financial Statements (FY2022)
The audited financial statements of Vectris Photonics, Inc. for the fiscal year ended December 31, 2022, prepared in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP"), and audited by Linden Ross & Co., LLP (engagement partner: Christine Park), are attached as Exhibit D-2.
Exhibit E — 4(c) and 4(d) Documents
Pursuant to Item 4(c) and Item 4(d) of the HSR Notification and Report Form, the filing person is required to submit copies of all studies, surveys, analyses, and reports that were prepared by or for any officer(s) or director(s) of the acquiring person (or, in the case of an unincorporated entity, individuals exercising similar functions) for the purpose of evaluating or analyzing the acquisition with respect to market shares, competition, competitors, markets, potential for sales growth, or expansion into product or geographic markets.
The identification and collection of responsive 4(c) and 4(d) documents is currently underway. Calderwood & Harkness is coordinating with Dr. Luisa Hartmann, General Counsel of Halcyon, to collect and review documents from Halcyon's board of directors (Vorstand and Aufsichtsrat) and senior management files that may be responsive to this Item. Responsive documents are expected to include, among other things, board presentations, strategic planning materials, competitive analyses, and internal memoranda relating to the proposed acquisition and the silicon photonics transceiver module market.
All responsive documents will be assembled, reviewed for privilege, Bates-numbered, and attached as Exhibit E prior to filing.
Filing Fee Calculation
The filing fee for this Notification and Report Form has been calculated in accordance with the HSR Act filing fee schedule, as amended by the Merger Filing Fee Modernization Act of 2022 and as adjusted by the FTC for fiscal year 2023.
The filing fee of $250,000 is payable by the acquiring person, Halcyon Semiconductor Aktiengesellschaft. Payment is to be made by wire transfer to the Federal Trade Commission Premerger Notification Office. Halcyon's Chief Financial Officer, Markus Ellinger, has been notified of the filing fee amount and has been requested to arrange for wire transfer payment in advance of the anticipated filing date of August 18, 2023. Confirmation of wire transfer completion should be provided to Howard Bellamy at Calderwood & Harkness upon execution.
Note: The precise filing fee amount is subject to confirmation against the fee schedule in effect on the date of filing. The fee schedule may be adjusted annually. The fee bracket and amount set forth above reflect Calderwood & Harkness's understanding of the currently applicable fee schedule and should be verified prior to filing.
Certification
I hereby certify that the information contained in this Notification and Report Form, and all exhibits and attachments hereto, is true, correct, and complete to the best of my knowledge and belief, formed after reasonable inquiry. I further certify that I am authorized to file this Notification and Report Form on behalf of the filing person, Halcyon Semiconductor Aktiengesellschaft.
This Notification and Report Form is filed pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, 15 U.S.C. § 18a, and the rules promulgated thereunder at 16 C.F.R. Parts 801–803, on behalf of Halcyon Semiconductor Aktiengesellschaft, as the acquiring person, in connection with the proposed acquisition of Vectris Photonics, Inc.
HALCYON SEMICONDUCTOR AKTIENGESELLSCHAFT (Acquiring Person)
By its authorized representative:
By: ________
Name: Howard Bellamy
Title: Specialist Partner, Antitrust & Competition, Calderwood & Harkness LLP
Authorized Representative of Halcyon Semiconductor Aktiengesellschaft
Date: August 18, 2023
INTERNAL DRAFTING NOTES AND OPEN ITEMS
ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL — INTERNAL WORK PRODUCT — NOT FOR FILING
The following is a checklist of open items requiring completion, confirmation, or resolution prior to finalization and filing of this Notification and Report Form on August 18, 2023. All items should be resolved by close of business on August 17, 2023, unless otherwise indicated.
Checklist of Open Items
Anticipated Regulatory Timeline
The following is the anticipated regulatory timeline for the HSR review:
•  Filing Date (anticipated): August 18, 2023
•  Commencement of Initial 30-Day Waiting Period: August 18, 2023 (upon acceptance of both filings)
•  Expiration of Initial 30-Day Waiting Period: September 18, 2023 (absent a Second Request)
•  Second Request Risk: Assessed as significant given the combined U.S. market share of approximately 47% in silicon photonics transceiver modules, per Calderwood & Harkness's Antitrust Risk Assessment Memorandum dated July 10, 2023. The likelihood of a Second Request is substantially elevated by the concentration in the overlap market and the parties' status as the two leading U.S. competitors in that market.
•  If Second Request is issued: The waiting period will be extended and will not expire until 30 days after Halcyon has substantially complied with the Second Request. Compliance typically requires several months of document production and preparation of interrogatory responses.
•  EUMR Form CO Filing (anticipated): On or about August 25, 2023 (European Commission Case M.11247)
Merger Agreement Timeline Provisions
The Merger Agreement provides the following timeline protections relevant to the regulatory review:
•  Outside Date: March 10, 2024
•  Automatic Extension: The Outside Date is subject to one automatic 90-day extension to June 10, 2024, if, as of the initial Outside Date, all conditions to closing have been satisfied or waived other than the condition relating to the receipt of required antitrust approvals. This automatic extension provides substantial additional runway for completion of the regulatory review process, including any Second Request compliance period.
•  Antitrust Termination Right: Pursuant to Section 8.1(d) of the Merger Agreement, either party may terminate the Merger Agreement if the required antitrust approvals (including HSR clearance) have not been obtained by the Outside Date (as extended, if applicable), provided that the failure to obtain such approvals is not attributable to a breach by the terminating party of its obligations under the Merger Agreement with respect to antitrust matters.
•  Reverse Break-Up Fee: If the Merger Agreement is terminated due to Halcyon's failure to obtain antitrust approvals under specified circumstances, Halcyon may be required to pay the reverse break-up fee of $28,000,000 to Vectris.
The combination of the initial Outside Date (March 10, 2024) and the automatic 90-day extension (to June 10, 2024) provides approximately ten months from the anticipated filing date for completion of the regulatory review process. This runway should be sufficient to accommodate an initial 30-day waiting period, a Second Request, a substantial compliance period, and potential negotiation of remedies or settlement, if necessary. However, if a Second Request is issued and compliance proves particularly complex (for example, due to the volume of 4(c)/4(d) documents or the breadth of custodian searches required), the timeline could become compressed. Early engagement with the reviewing agency and proactive preparation of potential remedy proposals are recommended.
END OF DRAFT — FOR INTERNAL REVIEW AND COMMENT PRIOR TO FILING — ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL
TO: | Dr. Luisa Hartmann, General Counsel, Halcyon Semiconductor Aktiengesellschaft
Oliver Mackenzie, Responsible Partner, M&A Practice, Calderwood & Harkness LLP
FROM: | Howard Bellamy, Specialist Partner, Antitrust & Competition, Calderwood & Harkness LLP
DATE: | August 16, 2023
RE: | Draft HSR Premerger Notification and Report Form — Halcyon Semiconductor AG / Vectris Photonics, Inc. Proposed Acquisition
Engagement No.: | 1032-00005
Field | Information
Name: | Halcyon Semiconductor Aktiengesellschaft
Address: | Halcyon-Platz 1, 81739 München, Germany
State or Country of Organization: | Federal Republic of Germany
Commercial Register: | Munich Commercial Register (Handelsregister), Registration No. HRB 178254, Local Court (Amtsgericht) Munich
Entity Type: | Aktiengesellschaft (AG) — a publicly traded German stock corporation organized under the German Stock Corporation Act (Aktiengesetz, AktG)
Stock Exchange Listings: | Frankfurt Stock Exchange (Ticker: HSAG); The Nasdaq Stock Market (American Depositary Receipt program; Ticker: HCYN)
ISIN (ADR): | US40582R1095
IRS Employer Identification Number: | [To be confirmed by Halcyon tax department — see Open Items]
Field | Information
Name: | Halcyon Acquisition Sub, Inc. ("Merger Sub")
Address: | c/o Pinnacle Corporate Services, Inc., 1209 Orange Street, Wilmington, DE 19801
State of Incorporation: | Delaware
Delaware Division of Corporations File No.: | 7634291
Date of Incorporation: | June 12, 2023
Sole Director: | Markus Ellinger
Authorized Capital: | 1,000 shares of common stock, par value $0.01 per share, all of which are issued and outstanding and held by Halcyon Semiconductor Aktiengesellschaft
Field | Information
Name: | Vectris Photonics, Inc.
Address: | 4750 Ridgepoint Drive, Suite 300, San Jose, CA 95134
State of Incorporation: | Delaware
Delaware Division of Corporations File No.: | 5918437
Entity Type: | Delaware C-corporation
Registered Agent in Delaware: | Capitol Corporate Services, LLC, 800 N. King Street, Suite 400, Wilmington, DE 19801
CUSIP (Common Stock): | 92553P108
Shareholder | Ownership (%) | Description
Dr. Anand Raghavan | 18.2% | Founder, Chief Executive Officer, and Chair of the Board of Directors of Vectris Photonics, Inc. Address: c/o Vectris Photonics, Inc., 4750 Ridgepoint Drive, Suite 300, San Jose, CA 95134
Granite Peak Ventures Fund IV, L.P. | 22.7% | Venture capital fund. General Partner: Granite Peak Ventures Management IV, LLC. Managing Partner: Rhys Calloway. Principal Office: 3000 El Camino Real, Suite 400, Palo Alto, CA 94306
Nordhaven Capital Partners III, L.P. | 14.5% | Private equity fund. General Partner: Nordhaven Capital GP III, LLC. Managing Partner: Simone Achterberg. Principal Office: Keizersgracht 452, 1016 GD Amsterdam, Netherlands
Stonebridge Institutional Investors, L.P. | 9.1% | Institutional investment fund. Portfolio Manager: Kenneth Morita. Principal Office: 200 Clarendon Street, 42nd Floor, Boston, MA 02116
Public Float | 35.5% | Shares held by public shareholders not individually exceeding the 5% reporting threshold
Component | Amount
Aggregate Equity Consideration (all cash): | $800,000,000
Basic Shares of Vectris Common Stock Outstanding: | 51,200,000 shares
In-the-Money Stock Options and Unvested RSUs (fully diluted): | 7,194,160 shares
Fully Diluted Shares: | 58,394,160 shares
Per-Share Merger Consideration: | Approximately $13.70 ($800,000,000 ÷ 58,394,160)
Unaffected Closing Share Price of Vectris Common Stock (May 19, 2023): | $9.82
Premium over Unaffected Closing Share Price: | Approximately 39.5%
Source | Amount | Description
Committed Term Loan Facility | $500,000,000 | Senior secured term loan from Meridian Atlantic Bank, N.A., pursuant to a commitment letter executed on August 8, 2023. The facility bears interest at Term SOFR plus 225 basis points. The facility is structured as a 364-day bridge with a mandatory refinancing obligation. A ticking fee of 20 basis points on the undrawn commitment amount will accrue beginning 90 days after the date of signing of the Merger Agreement (i.e., beginning November 8, 2023). The commitment is subject to customary conditions precedent, including the absence of a material adverse effect on Vectris and the accuracy of representations and warranties.
Cash on Hand (Halcyon) | $300,000,000 | Available cash and cash equivalents held by Halcyon Semiconductor Aktiengesellschaft and its subsidiaries, to be funded from Halcyon's existing corporate treasury.
Total Sources | $800,000,000
Role | Name
Chief Executive Officer (Vorstandsvorsitzende) | Dr. Katarina Breuer
Chief Financial Officer (Finanzvorstand) | Markus Ellinger
General Counsel (Chefjuristin) | Dr. Luisa Hartmann
Chair, Supervisory Board (Aufsichtsratsvorsitzender) | Prof. Dr. Friedrich Wendt
Metric | Amount
Revenue (FY2022) | €6,800,000,000 (approximately $7.3 billion at prevailing exchange rates)
Approximate Market Capitalization (as of signing date, August 10, 2023) | €22,400,000,000
NAICS Code | Description | Classification
334413 | Semiconductor and Related Device Manufacturing | Primary
334416 | Capacitor, Resistor, Coil, Transformer, and Other Inductor Manufacturing | Secondary (power management components)
334419 | Other Electronic Component Manufacturing | Secondary (RF components)
334220 | Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing | Secondary (RF modules)
334290 | Other Communications Equipment Manufacturing | Secondary (silicon photonics transceiver modules)
NAICS Code | Description | U.S. Revenue (FY2022) | Worldwide Revenue (FY2022)
334413 | Semiconductor and Related Device Manufacturing | [To be completed from Halcyon financial records] | [To be completed]
334416 | Capacitor, Resistor, Coil, Transformer, and Other Inductor Manufacturing | [To be completed] | [To be completed]
334419 | Other Electronic Component Manufacturing | [To be completed] | [To be completed]
334220 | Radio and Television Broadcasting and Wireless Communications Equipment Manufacturing | [To be completed] | [To be completed]
334290 | Other Communications Equipment Manufacturing | [To be completed] | [To be completed]
Total | [To be completed] | €6,800,000,000
Role | Name
Founder, Chief Executive Officer, and Chair of the Board | Dr. Anand Raghavan
President and Chief Operating Officer | Margaret ("Maggie") Sørensen
Chief Financial Officer | Julian Tate
General Counsel | Rebecca Lau
Metric | Amount
Revenue (FY2022) | $312,000,000
EBITDA (FY2022) | $74,000,000
EBITDA Margin | Approximately 23.7%
Multiple | Calculation | Result
EV/Revenue | $800,000,000 / $312,000,000 | Approximately 2.6×
EV/EBITDA | $800,000,000 / $74,000,000 | Approximately 10.8×
NAICS Code | Description | Classification
334413 | Semiconductor and Related Device Manufacturing | Primary (silicon photonics transceiver modules)
334290 | Other Communications Equipment Manufacturing | Secondary (co-packaged optics chiplets for data center interconnects)
334419 | Other Electronic Component Manufacturing | Secondary (optical/photonic components)
NAICS Code | Description | U.S. Revenue (FY2022) | Worldwide Revenue (FY2022)
334413 | Semiconductor and Related Device Manufacturing | [To be completed from Vectris financial records] | [To be completed]
334290 | Other Communications Equipment Manufacturing | [To be completed] | [To be completed]
334419 | Other Electronic Component Manufacturing | [To be completed] | [To be completed]
Total | [To be completed] | $312,000,000
NAICS Code | Description | Halcyon U.S. Revenue (FY2022) | Vectris U.S. Revenue (FY2022) | Halcyon Est. U.S. Share | Vectris Est. U.S. Share | Combined Est. U.S. Share
334413 | Semiconductor and Related Device Manufacturing | [To be completed] | [To be completed] | ~19% (silicon photonics) | ~28% (silicon photonics) | ~47% (silicon photonics)
334290 | Other Communications Equipment Manufacturing | [To be completed] | [To be completed] | [To be completed] | [To be completed] | [To be completed]
334419 | Other Electronic Component Manufacturing | [To be completed] | [To be completed] | [To be completed] | [To be completed] | [To be completed]
Term | Detail
Lender | Meridian Atlantic Bank, N.A.
Borrower | Halcyon Semiconductor Aktiengesellschaft
Facility Amount | $500,000,000
Type | Senior secured term loan
Interest Rate | Term SOFR + 225 basis points
Structure | 364-day bridge with mandatory refinancing obligation
Ticking Fee | 20 basis points on undrawn commitment, accruing from 90 days after signing of the Merger Agreement
Commitment Letter Date | August 8, 2023
Item | Detail
Transaction Value: | $800,000,000
Applicable Fee Bracket: | Transaction value greater than $500,000,000 but less than $1,000,000,000
Filing Fee: | $250,000
No. | Open Item | Responsible Party | Status | Deadline
1 | Halcyon IRS Employer Identification Number (EIN) confirmation — The IRS EIN for Halcyon Semiconductor AG must be confirmed by Halcyon's tax department and inserted in Item 1(a). | Halcyon Tax Department (via Dr. Luisa Hartmann) | Pending | August 17, 2023
2 | Final revenue breakdown by NAICS code — Halcyon — Detailed FY2022 revenue data by applicable NAICS code (U.S. and worldwide) must be obtained from Halcyon's finance department and inserted in Items 4(c) and 6(c). | Markus Ellinger / Halcyon Finance | Pending | August 17, 2023
3 | Final revenue breakdown by NAICS code — Vectris — Detailed FY2022 revenue data by applicable NAICS code (U.S. and worldwide) must be obtained from Vectris (via Whitfield, Prager & Loomis LLP / Douglas Prager) and inserted in Items 5(c) and 6(c). | Douglas Prager / Whitfield, Prager & Loomis LLP | Pending | August 17, 2023
4 | Item 4(c) and 4(d) document identification and collection — All board presentations, competitive analyses, strategy documents, and other materials prepared by or for officers or directors of Halcyon for the purpose of evaluating or analyzing the acquisition with respect to market shares, competition, competitors, or markets must be identified, collected, reviewed for privilege, Bates-numbered, and assembled as Exhibit E. | Dr. Luisa Hartmann / Howard Bellamy | In progress — initial collection underway | August 17, 2023
5 | Coordination with Whitfield, Prager & Loomis LLP on Vectris parallel filing — Ongoing coordination with Douglas Prager regarding timing and substance of Vectris's HSR filing. Both filings should be submitted on August 18, 2023. Confirm that Vectris's filing will be ready for simultaneous submission. | Howard Bellamy / Douglas Prager | Ongoing | August 17, 2023
6 | Prior acquisitions data — Halcyon — Information regarding acquisitions by Halcyon and its controlled entities in relevant NAICS codes (334413, 334290, 334419) during the preceding five years must be compiled and inserted in Item 7. | Halcyon Corporate Development (via Dr. Luisa Hartmann) | Pending | August 17, 2023
7 | Prior acquisitions data — Vectris — Information regarding acquisitions by Vectris in relevant NAICS codes during the preceding five years must be obtained (via Whitfield, Prager & Loomis LLP / Douglas Prager) and inserted in Item 7. | Douglas Prager / Whitfield, Prager & Loomis LLP | Pending | August 17, 2023
8 | Minority interest disclosures — Halcyon — Information regarding minority interests (5%+ of voting securities) held by Halcyon in entities operating in relevant product and geographic markets must be compiled and inserted in Item 8. | Halcyon Corporate Development / Halcyon Finance | Pending | August 17, 2023
9 | Minority interest disclosures — Vectris — Information regarding minority interests held by Vectris in entities operating in relevant product and geographic markets must be obtained and inserted in Item 8. | Douglas Prager / Whitfield, Prager & Loomis LLP | Pending | August 17, 2023
10 | Filing fee wire transfer confirmation — Markus Ellinger (CFO, Halcyon) must arrange for wire transfer of the filing fee to the FTC Premerger Notification Office and provide confirmation of completion to Howard Bellamy at Calderwood & Harkness. Wire transfer should be initiated no later than the morning of August 17, 2023. | Markus Ellinger / Halcyon Treasury | Pending | August 17, 2023 (wire initiation)
11 | Howard Bellamy telephone and email — Filing counsel contact information to be inserted in Items 1(c) and the cover page. | Howard Bellamy | To be completed | August 17, 2023

ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL

TRANSMITTAL MEMORANDUM

MEMORANDUM

ATTORNEY-CLIENT PRIVILEGED AND CONFIDENTIAL

HART-SCOTT-RODINO PREMERGER NOTIFICATION AND REPORT FORM

INTERNAL DRAFTING NOTES AND OPEN ITEMS

Record

Parties

Dates

Amounts