LINTHICUM, USA: Ciena Corp. announced the successful completion of its acquisition of substantially all of the optical networking and Carrier Ethernet assets of Nortel’s+ Metro Ethernet Networks (MEN) business.
The $773.8 million (USD) aggregate purchase price for the acquisition consists entirely of cash. The purchase price is subject to adjustment based upon the level of net working capital transferred to Ciena at closing, which is currently estimated to result in a downward adjustment to the aggregate purchase price of approximately $62 million.
In accordance with the asset sale agreement, prior to the closing 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 percent 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 already has completed several important milestones in its comprehensive integration plan, and remains focused on ensuring a smooth transition for the benefit of both customers and employees. Specifically:
* Ciena has selected its senior management and extended leadership teams and defined their areas of responsibility and accountability, and identified and confirmed substantially all of the organizational structure to the extent permitted by applicable law.
* Nearly 100 percent of the employment offers Ciena has extended to Nortel MEN employees have been accepted, including a significant number in management positions.
* Ciena has ensured that upon closing the applicable Nortel customer and supply contracts will successfully transition to Ciena.
* Philippe Morin, previously president of Nortel MEN, has been appointed Ciena’s Senior Vice President, Global Products Group.
* The vision for the transformed product portfolio has been determined, and a comprehensive portfolio update will be announced March 22, 2010.
Smith continued: “As we unite these two organizations, we are emphasizing performance in every aspect of the business and are organizing the newly-transformed Ciena to ensure we remain operationally efficient and financially strong. Staying true to our specialist roots, Ciena is now the only global supplier exclusively focused on converged optical Ethernet as a foundation for the next generation of service-and application-driven networks – creating a true industry leader.”