Fibre optic equipment maker Ciena has agreed to buy privately held Cyras Systems in a stock deal valued at $2.6bn.
Cyras is developing data-optimised optical switching systems for metropolitan area network applications that both companies said would extend Ciena's optical networking portfolio capabilities.
Patrick Nettles, chairman and chief executive at Ciena, said that Cyras complements Ciena's existing product set by extending its reach from the core of the service provider network to the metropolitan access and switching networks.
"The acquisition fills an important gap for Ciena. The Cyras product contributes by allowing a wider variety of connections to the network at relatively lower speeds but still at a high bandwidth connection," he said.
Under the terms of the agreement, Ciena said it plans to acquire all outstanding shares of Cyras in exchange for 27 million shares of Ciena common stock. Ciena also assumes $150m of Cyras' outstanding convertible debt.
Ciena said it plans to account for the transaction as a purchase and expects the deal to add to earnings during the second half of its fiscal 2002, but would dilute pro forma earnings per share for fiscal 2001 by 19 to 22 cents. This excludes one-time charges associated with the acquisition as well as the amortisation of intangibles and deferred stock compensation costs.
Scott Clavenna, president of PointEast Research, said: "A natural extension of Ciena's industry leading CoreDirectory products, Cyras' high capacity, data optimised, next-generation SONET transport and switching platform will deliver the economic benefits of optical networking further towards the edge of service provider networks than ever before."
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