CIENA, Lightera and Omnia To Unite in Revolutionary Combination.LINTHICUM, Md./CUPERTINO, Ca/MARLBOROUGH, Mass.--(BUSINESS WIRE)-- March 15, 1999-- The CIENA LightWorks(TM) Initiative: Delivering Carrier-Class Optical Networking Communications between computers, telephones and other electronic devices using light. An optical network is far more reliable and has far greater potential transmission capacity than networking in the electrical domain. See optical fiber. Solutions in Internet Time In the early days of the public Internet, Internet time referred to the breakneck speed with which companies scrambled to gain traffic and market share on the Web. A new business could come and go within a matter of weeks. CIENA Corporation Ciena Corporation NASDAQ: CIEN develops and markets communications network platforms and software, and offers professional services. The Company's broadband access, data and optical networking platforms, software tools, and global network services support worldwide telecom (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CIEN CIEN Ciena Corporation (stock symbol) ), Lightera Networks Inc. and Omnia Communications Inc., today announced The CIENA LightWorks Initiative, a plan to change the fundamental economics of service provider networks. CIENA launched this effort with agreements to acquire Lightera and Omnia, both privately held, in two separate transactions valued collectively at approximately $980 million. "CIENA has moved very swiftly and picked up two of the most exciting companies in optical communications Optical communications The transmission of speech, data, video, and other information by means of the visible and the infrared portion of the electromagnetic spectrum. today," said Richard A. Shaffer, principal at Technologic Partners. "CIENA, Lightera and Omnia are capitalizing on distinct technological dislocations and are independently targeting critical areas of concern for service providers. The combination is a powerful new force in the industry." "The broadband network of the future will need high-capacity intelligent optical transport and switching systems Switching systems (communications) The assemblies of switching and control devices provided so that any station in a communications system may be connected as desired with any other station. , and a new generation of access systems. With this bold move, CIENA has all these key building blocks," says Dr. John Ryan John Ryan can refer to:
Building CIENA LightWorks(TM) The introduction and widespread adoption of optical networking and dense wavelength division multiplexing See WDM. (DWDM (Dense WDM) The term given to wavelength division multiplexing (WDM) when significantly more channels were being added. Since WDM is increasingly more "dense" all the time, both terms are used synonymously. See WDM. DWDM - wavelength division multiplexing ) technology changed the economics of bandwidth in service-provider networks and opened the door for high-capacity services. CIENA's MultiWave(R) optical networking systems made it possible for carriers to deploy bandwidth economically and efficiently. Increasingly, the challenges faced by carriers become two-fold: managing and switching this newly available optically-enabled bandwidth and delivering innovative high-bandwidth services to customers. "With the application of DWDM technology in our MultiWave systems, CIENA successfully brought to market a dislocating technology - it changed the fundamental economics associated with deploying network bandwidth," said Patrick Nettles net·tle n. 1. Any of numerous plants of the genus Urtica, having toothed leaves, unisexual apetalous flowers, and stinging hairs that cause skin irritation on contact. 2. Any of various hairy, stinging, or prickly plants. , CIENA's president and chief executive officer. "We believe the products to be introduced by both Lightera and Omnia can have similar economic impact on the costs associated with next-generation core switching and access respectively." "The addition of Lightera and Omnia dramatically expands CIENA's addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market opportunity and augments our in-house efforts to broaden our product lines," continued Nettles. "We believe both of these companies will have significant advantages in what analysts have identified as rapidly growing markets. Combined, we become uniquely positioned in the industry to offer complete optical networking solutions that enable carriers to build simpler, smarter optical networks networks of light, or lightworks." Simply Smarter Light At the heart of the new network infrastructure is CIENA's MultiWave optical networking equipment and Lightera's intelligent optical core switching platform. "Carriers need core network elements that meet or exceed WDM (1) (Wavelength Division Multiplexing) A technology that uses multiple lasers and transmits several wavelengths of light (lambdas) simultaneously over a single optical fiber. scalability and keep pace with exploding bandwidth demands," said Jagdeep Singh, Lightera's president and chief executive officer. "CIENA provides bandwidth; now service providers need intelligent, dynamic provisioning and grooming. They need flexible capacity management and a range of survivability sur·viv·a·ble adj. 1. Capable of surviving: survivable organisms in a hostile environment. 2. That can be survived: a survivable, but very serious, illness. options all at greatly reduced capital and operating costs operating costs npl → gastos mpl operacionales and at manageable risk." Announced in early March, with commercial availability expected in the second half of 1999, Lightera's Core Director intelligent optical core switch is targeted at delivering scalable, ultra-high density, high-capacity switching, as well as real-time provisioning with order-of-magnitude improvements in carrier infrastructure cost of ownership. A suite of protection and restoration capabilities allows carriers to build mesh, ring or hybrid mesh-ring optical cores without legacy SONET equipment. "Lightera and CIENA share a vision of a flatter, more cost efficient next generation network with far fewer network elements," explained Singh. "CIENA's established footprint in carrier networks worldwide and the Company's reputation as the leader in optical networking make CIENA an ideal partner for Lightera. With Omnia's approach to service distribution factored into the mix the combination becomes even more powerful." Intelligent Service Distribution "CIENA and Lightera have targeted the challenges at the core of the network and together will provide scalable, survivable sur·viv·a·ble adj. 1. Capable of surviving: survivable organisms in a hostile environment. 2. That can be survived: a survivable, but very serious, illness. core bandwidth," said Michael Champa, president and chief executive officer of Omnia. "The addition of Omnia creates a solution that distributes network bandwidth and makes it possible for carriers to offer and generate revenue from a variety of services tuned to specific customer applications." Omnia's AXR AXR Absolute Executive Recruitment (Sydney, NSW, Australia) AXR Abdominal X-Ray 500 is a next generation multi-service transport platform that combines the functions of traditional transport equipment with advanced data networking. The AXR 500 utilizes packet and cell technology to enable service providers to deliver both legacy services and advanced high-speed data services over an integrated optical infrastructure. "Packet and cell technology combined with an integrated transport and access platform means carriers can lower the hurdle rate Hurdle Rate The minimum amount of return that a person requires before they will make an investment in something. Notes: This is the rate of return that will get someone "over the hurdle" and invest their money. for delivering multi-megabit Internet services while supporting existing voice and private line services over their current fiber optic infrastructures," said Champa. "By joining forces with CIENA and Lightera, Omnia extends the reach of both our AXR 500 and CIENA's MultiWave(TM) Metro(TM) - service providers can provision services from 64 Kbps or DS0, to 60 Gbps on a common optical infrastructure." Transaction Terms Under the terms of the agreement with Lightera, CIENA will acquire all outstanding shares of Lightera in exchange for approximately 20.6 million shares of CIENA common stock. Under the terms of the agreement with Omnia, CIENA will acquire all outstanding shares of Omnia in exchange for 16 million shares of CIENA common stock. The transactions are intended to be accounted for as pooling of interests Pooling of Interests An accounting method, used in mergers and acquisitions, where the balance sheet items of the two companies are simply added together. Notes: The opposite of pooling of interests is the purchase acquisition method. transactions and to qualify as tax-free reorganizations. Based on the closing price of CIENA common stock on Friday, March 12, 1999, the Lightera transaction is valued at approximately $552 million and the Omnia transaction is valued at approximately $429 million. CIENA expects the transactions will become accretive during the Company's fiscal year 2000, assuming expected revenue and cost synergies, as well as expected product pricing. The Board of Directors of CIENA, Lightera and Omnia have approved the transactions. Shareholders of Lightera also have approved the transaction, and shareholders holding more than 70% of the outstanding shares of Omnia have agreed to vote in favor of the transaction when voted upon at a special shareholder meeting. Subject to regulatory approvals and customary closing conditions, CIENA expects the Lightera transaction to close in the March/April timeframe and the Omnia transaction to close in the June/July timeframe. The transactions are not conditional on one another. Organization Following completion of the transaction the Company will be organized into three operating units, representing the current businesses of CIENA, Lightera and Omnia. Patrick Nettles, CIENA's president and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. will continue in that capacity for the combined organization and will continue to head the operating division formed by CIENA's current business. Jagdeep Singh, president and CEO of Lightera will assume the role of Division President for the division formed by Lightera's business. Michael Champa, president and CEO of Omnia will become Division President for the business unit formed by Omnia's business. Both Singh and Champa will report to Nettles. The companies' sales efforts will be combined and integrated under CIENA's Senior Vice President Worldwide Sales, Gary Smith Gary Smith may refer to:
NOTE TO INVESTORS The descriptions and explanations of the revolutionary potential benefits of the transactions identified in this press release represent forward-looking statements. Whether such potential benefits will be realized, including the expectation of earnings accretion during the Company's fiscal year 2000 and the related expectation of revenue and cost synergies, is subject initially to closing of the transactions, and thereafter to a number of material risks. The Company's actual results may differ substantially from those implied by the forward-looking statements due to the risks associated with integrating three companies at once, the significant execution risk involved in bringing the Lightera and Omnia products to commercial production, the challenge of key employee retention at all three companies, and the intense competition from substantially larger companies which the Company will face. The Company intends to address these risks in the context of its regular public filings, and expects to do so initially upon closing of the first of the two transactions--the Lightera acquisition--which is expected to occur in the March/April time frame. The Company's current operations remain subject to a number of risks, as discussed in more detail in the Company's Annual Report on Form 10K as filed with the Securities and Exchange Commission on December 9, 1998, and in the Company's Quarterly Report on Form 10Q as filed with the SEC on February 17, 1999. About CIENA Additional information about CIENA and its Lightworks Initiative can be found on its worldwide Website: http://www.ciena.com Based in Linthicum, Maryland Linthicum is a census-designated place (CDP) and an unincorporated community in Anne Arundel County, Maryland, United States. The population was 7,539 at the 2000 census. It is the approximate location of Baltimore-Washington International Thurgood Marshall Airport (BWI). , CIENA Corporation is a market leader of open architecture, optical networking systems that form the core of telecommunications networks worldwide. CIENA's networking solutions utilize bandwidth expanding dense wavelength division multiplexing (DWDM) technology and include the MultiWave(R) 1600 long-haul transport system, WaveWatcher(R) network management software, the MultiWave Optical Add/Drop Multiplexer A device installed at an intermediate point on a transmission line that enables new signals to come in and existing signals to go out. In a typical example, most signals pass through the device, but some would be "dropped" by splitting them from the line. , the MultiWave Sentry(TM) enhanced long-distance transport system and the new MultiWave(R) Firefly and MultiWave Metro(TM) short-haul systems. Through its CIENA Services subsidiary, CIENA provides a range of engineering, furnishing and installation (EF&I) services for telecommunications service providers in the areas of transport, switching and wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. . About Lightera Lightera Networks is a carrier core switch provider based in Cupertino, CA. The company was founded in April 1998 to serve traditional long-haul carriers as well as new IXCs. By mid-1999, Lightera will bring to market its intelligent optical core switch, enabling highly scalable, flexible and reliable optical backbone networks. Lightera solutions will give carriers the lowest cost of ownership. Experts from the carrier and switch manufacturer domains lead Lightera's in-house optical network engineering, ASIC (Application Specific Integrated Circuit) Pronounced "a-sick." A chip that is custom designed for a specific application rather than a general-purpose chip such as a microprocessor. design, high availability software development, and customer field operations. For more information about Lightera, visit www.lightera.com About Omnia Omnia Communications, Inc. is an emerging provider of access and transport products that enable public network operators to deliver integrated communications services over fiber optic access networks. Omnia's first product, the AXR 500, is a multi-service access and transport platform with advanced quality of service (QoS) technology that enables public network operators to deliver voice and data services efficiently, offer advanced value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. services, and reduce network deployment and management costs. Omnia was founded in June of 1997, and was financed through private investment from James Dow and venture capital from Charles River Ventures, Bessemer Venture Partners Bessemer Venture Partners is a private venture capital firm with offices in Silicon Valley, New York, Massachusetts, China, and India. It has backed such companies as Ciena, Flarion, Parametric Technologies, Skype, Staples, VeriSign and Veritas. , Atlas Venture, and STAR Ventures. Additional information about Omnia may be found at its worldwide Website: http://www.omnia.com |
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion