8-KMaterial AgreementsSecurities & ListingOther Events+1

CIENA CORP 8-K Report, Material Agreement (Oct 7, 2009)

Filed October 7, 2009For Securities:CIEN

Summary

Ciena Corporation (CIEN) has announced a significant strategic acquisition on October 7, 2009, entering into definitive agreements to purchase substantially all of the North American, Caribbean, Latin American, and Asian optical networking and carrier Ethernet assets from Nortel Networks Corporation's Metro Ethernet Networks (MEN) business. This acquisition, along with a parallel agreement for the European, Middle Eastern, and African (EMEA) assets, involves a total consideration of $390 million in cash and 10 million shares of Ciena common stock. The acquired assets include a robust portfolio of optical transport, Ethernet switching and transport solutions, and related intellectual property, positioning Ciena to strengthen its market presence in key technology areas.

Key Highlights

  • 1Ciena is acquiring substantially all of Nortel's Metro Ethernet Networks (MEN) optical and carrier Ethernet assets across North America, Latin America, Asia, and EMEA.
  • 2The total purchase price is $390 million in cash, plus 10 million shares of Ciena common stock.
  • 3The acquired assets include long-haul optical transport, metro optical Ethernet solutions, and related intellectual property.
  • 4The transaction is subject to a competitive bidding process under the U.S. Bankruptcy Code and Canadian CCAA, requiring court approvals.
  • 5Ciena expects to hire at least 2,000 Nortel employees as part of the acquisition.
  • 6Integration costs are estimated at approximately $180 million, with most expected in 2010.
  • 7A transition services agreement is planned, with Ciena estimating annual payments of up to $100 million to Nortel for support services for up to 24 months.

Frequently Asked Questions

This 8-K filing announces Ciena Corporation's entry into material definitive agreements to acquire significant optical networking and carrier Ethernet assets from Nortel Networks Corporation. It details the terms of the acquisition, including the purchase price, the assets being acquired, and the conditions that must be met for the transaction to close.

The total consideration for the acquisition is $390 million in cash and 10 million shares of Ciena common stock. Ciena also anticipates incurring approximately $180 million in integration-related costs, with additional estimated annual payments of up to $100 million for transition services from Nortel.

Yes, the acquisition is subject to a competitive bidding process under bankruptcy court approvals in the U.S. and Canada. This means other bidders could submit higher offers, and the transaction's finalization depends on various court approvals, regulatory clearances (e.g., antitrust), and the successful completion of the bidding process by specific deadlines.

Ciena will acquire Nortel's optical networking and carrier Ethernet product lines, including long-haul optical transport, metro optical Ethernet switching and transport solutions, and related network management software. Crucially, the deal also includes the transfer of all patents and intellectual property predominantly used in these optical and carrier Ethernet businesses.