Ciena Acquires Two Companies In All-Stock Deals

Ciena Corp. on Thursday said it has agreed to acquire two companies for about $637 million in stock, as the optical networking systems maker looks to expand its market reach and product portfolio.

The announced acquisitions of Catena Networks Inc. and Internet Photonics Inc. occurred at the same time the Linthicum, Md.-based, Ciena reported a narrower loss for the first quarter on a continued revenue slump.

Under the Catena deal, Ciena will buy the broadband-access company for 77.5 million common shares, valued at $486.7 million, based on Ciena's Wednesday closing price. The transaction is expected to close by the end of Ciena's third fiscal quarter.

Following completion of the deal, Catena will form Ciena's Broadband Access group led by Jim Hjartarson, president and chief executive of Catena, which has offices in Canada and Research Triangle Park, N.C.

In the Internet Photonics deal, Ciena will buy the supplier of carrier-grade optical Ethernet transport and switching equipment for 24.4 million common shares valued at $150 million. The purchase is expected to close about the same time as the Catena deal. Internet Photonics, which has offices in Shrewsbury, N.J., and Marlborough, Mass., will be part of Ciena's Metro & Enterprise Solutions group."A key element of Ciena's strategy is to drive future revenue and earnings by taking steps to expand our addressable market and the set of solutions we offer our customers," Gary Smith, president and chief executive of Ciena, said in a statement.

For the first fiscal quarter ended Jan. 31, Ciena reported a loss of $76.7 million, or 16 cents a share, compared to $107.1 million, or 25 cents a share, for the same period a year ago. Revenue dropped to $66.4 million from $70.5 million.