Ciena to Buy Telecom Company ONI
LINTHICUM, Md. (AP) _ Optical networking equipment maker Ciena Corp. said Monday it will acquire telecommunications company ONI Systems in a deal valued at $900 million.
The sale gives Ciena access to San Jose, Calif.-based ONI’s metropolitan networks, the system of optical equipment that connects individual and corporate clients to long-distance networks.
``With this acquisition, Ciena dramatically expands its metropolitan presence,″ said Gary Smith, Ciena’s CEO.
Individual shares of ONI will be exchanged for .7104 shares of Ciena stock under the agreement and will give ONI shareholders a 24 percent stake in the new company.
Ciena expects to save $55 to $65 million annually from the merger, and the new company will have $1.3 billion in debt. ONI chairman Hugh Martin is not expected to remain with the company, Ciena said.
Ciena has suffered from deep cutbacks in telecommunications spending, and announced recently that it will cut 12 percent of its work force.
Markets were closed Monday for the President’s Day holiday, but Ciena last traded at $8.73 per share on the Nasdaq stock market.