CIENA Corporation, providers of intelligent optical networking systems and ONI Systems, providers of optical networking equipment, have announced a definitive agreement under which the companies would combine to form a new next-generation optical networking leader.
Under the terms of the agreement, all outstanding shares of ONI common stock will be exchanged at the ratio of 0.7104 shares of CIENA common stock for each share of ONI common stock, which will represent approximately 24% ownership of the combined company.
Based on the closing price of CIENA stock on Friday, February 15, 2002, the deal is valued at approximately $900 million.
CIENA expects the transaction will result in annualised operating expense synergies of $55 to $65 million for the combined company, as well as additional manufacturing efficiencies. It is estimated that the combined company would have approximately $1.3 billion of cash net of debt as of January 2002.
According to a statement, the boards of directors of both CIENA and ONI have each approved the transaction. It is expected that this transaction will close during the second or third calendar quarter of 2002. Upon closing, the combined company will retain the CIENA name and will be headquartered in Linthicum, Maryland.