Ciena puts in play Nortel's ethernet assets with $521 million stalking horse bid

Network specialist Ciena Corporation has put in play Nortel Networks' optical networking and carrier ethernet assets by making a stalking horse bid of $521 million.

Once Canada's largest telecommunications equipment company, Nortel Networks, now under bankruptcy restructuring, said today that it has agreed to a stalking horse asset sale agreement with Maryland-based Ciena Corporation.

Ciena is offering $390 million in cash and 10 million shares of Ciena common stock, based on the closing price of Ciena's common stock on NASDAQ on 6 October 2009, which has a current market value of approximately $131 million, bringing the implied total value of the purchase consideration to approximately $521 million.

Last month, Nortel had announced that it plans to sell by auction the assets of its carrier networks business associated with the development of next generation packet core network components (packet core assets). (See: Nortel to sell its carrier network business as well)

The company had also said that it will grant the purchaser a non-exclusive licence of relevant patent intellectual property as part of the sale.

The product and technology assets to be acquired include Nortel's long-haul optical transport portfolio; metro optical Ethernet switching and transport solutions; Ethernet transport, aggregation and switching technology; multiservice SONET / SDH product families; and network management software products.