|Image Credit: TelecomLead|
The deal would give Ciena the ability to sell customers software systems used to operate large networks, along with its fiber-optic networking gears. It will also strengthen Ciena's portfolio of software defined networking and network functions virtualization technologies.
Under the terms of the deal, Cyan shareholders will receive stock and cash equal to 0.224 shares of Ciena common stock, or about $4.75 per share. In addition, Ciena will assume Cyan's $50 million in outstanding 8 percent convertible senior secured notes due 2019. The $4.75 per-share bid for Cyan represents a 30 percent premium to Cyan's Friday closing price of $3.65.
Based in Petaluma, California, Cyan is a leading provider of metro packet and software defined networking solutions (SDN). It also offers multi-vendor network and service orchestration and next-generation network management software with advanced virtualization. Cyan has built a strong customer base that is complementary to Ciena which provides fiber optics networking.
Gary Smith, CEO Ciena Corp., said in a statement that: “Ciena is transforming networks by applying web-scale technologies for delivering greater efficiency, network automation and agility while driving the industry toward an open ecosystem”, and also added that: “the addition of Cyan accelerates the availability of a complete solution for our customers to deliver virtualized networks and services on-demand.”
Mark Floyd, Cyan's Chairman and CEO, said in a statement that the two companies together “will provide our customers with the technologies they demand for a software-controlled operational model, orchestrating services on top of a scalable network, with the ability to rapidly create revenue streams in the new virtualized, on-demand world. The combination enables greater monetization for network operators through more efficient utilization of network assets and faster time-to-market with differentiated and profitable services.”
Headquartered in Hanover, Maryland, Ciena Corporation is a network specialist and a global supplier of telecommunication networking equipment, software and services, it products are used in telecommunications networks operated by telecom companies, cable companies and government agencies. The company was founded in 1992 by David Huber, Kevin Kimberlin, Lawrence Huang and Optelecom. In 2010, Ciena made a huge move when it bought from Nortel Networks its optical networking and carrier Ethernet business for $774 million.
The deal which has been approved by the board of directors of both companies is expected to complete during Ciena's fiscal fourth quarter 2015. Morgan Stanley & Co LLC was Ciena's financial adviser, and Hogan Lovells acted as legal counsel. Jefferies LLC advised Cyan while Wilson Sonsini Goodrich & Rosati provided legal advice.