Ciena seals deal for Nortel's metro Ethernet assets

Nicole McCormick
22/03/2010
News
Daily News

Ciena has completed its acquisition of the optical and carrier Ethernet assets of Nortel for $773.8 million in cash.

Ciena said the deal makes it the “world’s largest supplier exclusively focused on converged optical Ethernet.”

The purchase price could be revised downwards by around $62 million, depending on the final agreed net working capital to be transferred to Ciena.

The final purchase price is cash only, and not cash and bonds as initially agreed by Ciena and Nortel last year.

Ciena said it “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% of the face amount of the notes replaced, or $243.8 million.”

Ciena trumped Nokia Siemens Networks and its partner, private-equity firm One Equity Partners, in the auction for Nortel's Metro Ethernet Networks business last year with a winning bid of $769 million.

Nortel filed for bankruptcy protection in Toronto in January.

Part of its asset unraveling is the reported sale of controlling stake in the LG-Nortel joint venture to Ericsson.

Nortel's Metro Ethernet business has more than 1,000 customers, mostly in North America.

In the nine months to September 2009, the arm generated $988 million in revenues, down 21% from the previous period.

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