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CIENA CORP 8-K Report, Material Agreement (Jan 24, 2008)

Filed January 24, 2008For Securities:CIEN

Summary

Ciena Corporation (CIEN) announced on January 24, 2008, a significant development: the entry into a definitive Agreement and Plan of Merger with World Wide Packets, Inc. This strategic move involves Ciena acquiring World Wide Packets through a merger, making World Wide Packets a wholly owned subsidiary of Ciena. The transaction, approved by the boards and stockholders of both companies, is structured as an all-stock and cash deal, with an approximate total consideration of $200 million in cash and roughly 3.4 million shares of Ciena common stock. This acquisition signifies Ciena's intent to expand its capabilities and market presence. Investors should note that a portion of the deal consideration, specifically $20 million in cash and 340,000 Ciena shares, will be held in escrow for one year to cover indemnification obligations. The transaction is subject to customary closing conditions, including antitrust approvals. Ciena will also assume World Wide Packets' outstanding stock options and warrants, converting them into Ciena stock or equivalent rights. This move is expected to integrate World Wide Packets' technology and customer base into Ciena's operations.

Key Highlights

  • 1Ciena Corporation to acquire World Wide Packets, Inc. via a merger agreement.
  • 2Transaction valued at approximately $200 million in cash and 3.4 million shares of Ciena common stock.
  • 3Merger is an all-stock and cash transaction, with World Wide Packets becoming a wholly owned subsidiary of Ciena.
  • 4$20 million in cash and 340,000 Ciena shares will be placed in escrow for indemnification.
  • 5Ciena will assume and convert World Wide Packets' outstanding stock options and warrants.
  • 6Transaction is subject to customary closing conditions, including antitrust approvals (e.g., Hart-Scott-Rodino Act).
  • 7Shares issued in the merger and to warrant holders will be registered for resale by Ciena.

Frequently Asked Questions

This 8-K filing reports the entry into a material definitive agreement, specifically an Agreement and Plan of Merger between Ciena Corporation and World Wide Packets, Inc. It outlines the terms and conditions of Ciena's acquisition of World Wide Packets.

The total consideration for the acquisition is approximately $200 million in cash and about 3.4 million shares of Ciena common stock. A portion of this will be subject to adjustments based on World Wide Packets' debt and transaction expenses at closing.

Ciena will assume all outstanding World Wide Packets stock options and convert them into options to acquire Ciena common stock. Unexercised World Wide Packets warrants will be converted into the right to receive cash and Ciena common stock, equivalent to what a World Wide Packets stockholder would have received.

Yes, the closing of the merger is subject to customary conditions, including the expiration or termination of waiting periods under antitrust laws like the Hart-Scott-Rodino Antitrust Improvements Act. The actual merger consideration is also subject to adjustments based on World Wide Packets' debt and transaction expenses.