By Contributing Editor Stephen Hardy, Lightwave
Ciena Corp. (NASDAQ: CIEN) has completed the acquisition of substantially all of the optical networking and Carrier Ethernet assets of Nortel’s Metro Ethernet Networks (MEN) business.
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Ciena put in the original stalking horse bid for the assets from the bankrupt Nortel, overcame Nokia Siemens Networks when the assets were auctioned, then bested its rival again in court (see “Ciena becomes Nortel MEN stalking horse,” “Ciena wins Nortel MEN auction,” and “Ciena overcomes NSN protest to win Nortel MEN court approval”).
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The $773.8 million aggregate purchase price consists entirely of cash. It is subject to adjustment based upon the level of net working capital transferred to Ciena at closing. This is currently estimated to result in a reduction of approximately $62 million in the aggregate purchase price. Ciena elected to replace the $239 million in convertible notes that were to be issued as part of the aggregate purchase price with cash equivalent to 102% of the face amount of the notes replaced, or $243.8 million.
“The acquisition of these assets accelerates Ciena’s overall strategy and gives us stronger operating leverage to continue investing in innovation that will allow us to deliver on our vision for next-generation networks,” said Gary Smith, Ciena’s president and CEO. “With broader geographic reach, deeper customer relationships and a stronger portfolio of solutions, we’re confident that this acquisition positions Ciena for faster growth.”
Ciena says it has made headway on integrating its new assets. This includes a strategy for revamping its product portfolio. Details of how the company will mesh Nortel’s technology with its own will be released March 22, Ciena says.
As part of the integration strategy, Philippe Morin, previously president of Nortel MEN, has been appointed Ciena’s senior vice president, Global Products Group.
Commenting on the close of the sale, Tim Harden, president, supply chain and fleet operations at AT&T, said, “We believe that consolidation of optical networking and Carrier Ethernet assets will accelerate innovation and speed to market for new technologies and network solutions. Our goal is to ensure that each investment in network infrastructure accelerates our move towards a network that enables the full promise of the Internet and other game-changing technologies.”