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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
February 19, 2004
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Date of Report (Date of earliest event reported)
CIENA Corporation
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(Exact name of registrant as specified in its charter)
Delaware 0-21969 23-2725311
(State or other (Commission File No.) (IRS Employer Identification No.)
jurisdiction
of incorporation)
1201 Winterson Road, Linthicum, Maryland 21090
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(410) 865-8500
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Not applicable
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(Former name or former address, if changed since last report)
Item 5. Other Events and Regulation FD Disclosure.
On February 19, 2004, CIENA Corporation issued a press release announcing its
intent to acquire Catena Networks, Inc. The press release is being furnished
hereto as Exhibit 99.1.
Item 7. Financial Statements and Exhibits.
99.1 Press Release dated February 19, 2004.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CIENA CORPORATION
Date: February 19, 2004 By: /s/ Russell B. Stevenson Jr.
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Russell B. Stevenson, Jr.
Senior Vice President,
General Counsel and Secretary
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Exhibit 99.1
CIENA Announces Execution of Agreement to Acquire Catena Networks;
Adds Industry-Leading Broadband Access to Its
Growing Solutions Portfolio
LINTHICUM, Md.--(BUSINESS WIRE)--Feb. 19, 2004--CIENA(R) Corporation
(NASDAQ: CIEN), a leading global provider of innovative network solutions, today
announced the execution of a definitive agreement to acquire privately held
Catena Networks, Inc. With offices in Ottawa, Ontario and Research Triangle
Park, N.C., Catena is a leader in the broadband access market.
"The combined companies will have a very attractive solutions portfolio,"
said Bill Smith, chief technology officer at BellSouth, which has deployed
Catena's broadband access systems throughout its nine-state operating area. "We
remain committed to accelerating the delivery of high-value broadband services
to our subscribers, and this move will give Catena the resources to continue to
develop and enhance its products to support our plans."
"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," said Gary Smith, CIENA's president and CEO. "By joining
forces with Catena Networks, an acknowledged broadband access leader with
meaningful revenue and a significant and complementary customer base, we
accelerate CIENA's path to profitability. We also gain access to a market that
is expected to benefit as service providers shift spending to target the access
portions of their networks, building out DSL and fiber-based access."
Catena Networks has deployed more than 5,500 integrated broadband access
solutions with Regional Bell Operating Companies (RBOCs), major Independent
Operating Companies (IOCs) and Competitive Local Exchange Carriers (CLECs).
"By uniting with CIENA we immediately and dramatically enhance the scope of
Catena's sales and support resources - a task that otherwise would have required
significant investment over several years," said Jim Hjartarson, president and
CEO of Catena. "With CIENA, we also have the ability to retain the momentum and
energy of a young, next-generation company and the opportunity to play a
significant role in CIENA's transformation to a comprehensive networking
solutions provider. We expect the combination of our access solutions and our
existing customer traction, with CIENA's scale and reputation for delivering
economically driven network solutions, will be a winning scenario for both
companies and their customers, employees and shareholders."
The Broadband Access Market
"Catena is well positioned in the broadband access market, a space that is
certain to capture a growing percentage of carriers' capex budgets," said Matt
Davis, director of broadband access technologies at The Yankee Group. "The
combination with CIENA immediately addresses the typical questions of scale or
stability that any privately held vendor generates and makes Catena an even more
credible threat to incumbent vendors in the access space."
According to market research by The Yankee Group, the number of broadband
subscribers in the U.S. will nearly double in the next four years, growing from
33.5 million in 2004 to 61.5 million in 2008. The Yankee Group also anticipates
growth will be stronger on a global basis with the number of broadband
subscribers estimated to grow by more than 100%, from 142 million in 2004 to 327
million in 2008. The Yankee Group expects that overall, broadband equipment
revenues in the access area will present a market opportunity in excess of $7.5
billion.
"Broadband subscriber growth means new revenue opportunity for service
providers and a growing market for Catena's products," Davis said. "Catena's
solutions are engineered to cost-effectively deliver voice, data and video
services over both copper and fiber infrastructures - including
Fiber-to-the-Premises and Fiber-to-the-Curb. When coupled with CIENA's
multiservice DN7 family, carriers will get a compelling offering to enable new
DSL, voice-over-packet, and passive-optical-network services."
Catena Networks Product Overview
CNX-5
The CNX-5 Broadband DSL System is a card-for-card upgrade solution for
Lucent SLC(R) Series 5 (SLC-5) Digital Loop Carriers. It provides two lines of
integrated Plain Old Telephone Service (POTS) and Digital Subscriber Line (DSL)
service and replaces cards that provide two lines of POTS only. The CNX-5 gives
carriers a simple, cost-effective and scalable way to broadband-enable their
installed base of SLC-5s, without reducing the number of available POTS lines.
CN1000
The CN1000 Broadband Loop Carrier is a high-density broadband access system
that delivers integrated voice, data and video services at a fraction of the
cost of competing systems. The CN1000 provides POTS, DSL and Packet Voice
capability on every line, enabling carriers to software-provision these services
to any subscriber -- remotely, without manual intervention. By integrating the
functions of a Next Generation Digital Loop Carrier (NGDLC), a video-enabled
Digital Subscriber Line Access Multiplexer (DSLAM), a fiber multiplexer and a
packet-ready media gateway (VoIP), the CN1000 greatly simplifies the access
network.
CN1000FX
The CN1000FX Fiber-to-the-X solution enables carriers to drive fiber deeper
into their networks and profitably deploy new broadband services such as video.
The CN1000FX solution uniquely addresses Fiber-to-the-Home (FTTH),
Fiber-to-the-Curb (FTTC) and copper distribution requirements simultaneously, on
a single platform, helping carriers future-proof their networks by maximizing
deployment flexibility. Carriers can cost-effectively address multiple
deployment scenarios - including new-build and neighborhood-overlay
opportunities - with the same, flexible access system.
Transaction Terms and Timing
Under the terms of the acquisition agreement, Catena Networks will merge
into CIENA, and all the outstanding shares of Catena common and preferred stock
will be exchanged for shares of CIENA common stock. CIENA also will assume
Catena's employee stock options and warrants which will be converted into
options and warrants to purchase CIENA shares. The total number of shares
issuable in respect of Catena outstanding stock, options and warrants is
approximately 77.5 million shares of CIENA common stock which, based on the
closing price of CIENA's stock on February 18, 2004, have an aggregate value of
approximately $486.7 million.
CIENA expects the transaction to qualify as a tax-free reorganization. This
transaction is subject to various conditions and approval by appropriate
government agencies and the stockholders of Catena. The boards of directors of
both CIENA and Catena Networks each have approved the transaction. It is
expected that this transaction will close by the end of CIENA's third fiscal
quarter 2004. For accounting purposes, the value of the transaction will be
determined using a five-day average of CIENA's common stock's closing price
beginning on February 17, 2004.
Following completion of the transaction, Catena Networks will form CIENA's
Broadband Access group, led by Hjartarson, and based in Ottawa.
Morgan Stanley served as financial advisor to CIENA on this transaction.
Goldman Sachs served as financial advisor to Catena.
Live Conference Call/Web Broadcast
Separately today, CIENA also announced its intent to acquire Internet
Photonics, Inc., as well as results for its fiscal first quarter. In conjunction
with these announcements, CIENA will host a discussion about the agreement with
investors and financial analysts today, Thursday, February 19, 2004 at 8:30 a.m.
(Eastern). The live broadcast of the discussion will be available via CIENA's
homepage at www.CIENA.com. An archived version of the discussion will be
available shortly following the conclusion of the live broadcast on the Investor
Relations page of CIENA's website at: www.CIENA.com/investors.
ABOUT CIENA
CIENA Corporation delivers innovative network solutions to the world's
largest service providers and enterprises, increasing the cost-efficiency of
current services while enabling the creation of new carrier-class data services
built upon the existing network infrastructure. Additional information about
CIENA can be found at www.ciena.com.
ABOUT CATENA NETWORKS
Catena Networks' integrated broadband access solutions enable service
providers to profitably deliver voice, data and video services and smoothly
migrate to packet-based networks. These solutions include the CNX-5 Broadband
DSL System, the CN1000 Broadband Loop Carrier, and the CN1000FX Fiber-to-the-X
solution.
This press release includes certain "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. The forward-looking statements in this document
include statements about future financial and operating results and the proposed
CIENA/Catena Networks transaction. These statements are based on our
expectations and are naturally subject to uncertainty and changes in
circumstances. Actual results could vary materially from these expectations. The
following factors, among others, could cause actual results to differ materially
from those described herein: inability to obtain, or meet conditions imposed
for, governmental and other approvals for CIENA's acquisition of Catena,
including approval by the stockholders of Catena; the risk that the CIENA and
Catena businesses will not be integrated successfully; the costs related to the
merger; and other economic, business, competitive and/or regulatory factors
affecting CIENA's and Catena's business generally. More detailed information
about these and other factors is set forth in CIENA's Quarterly Report on Form
10-Q for the quarter ended January 31, 2004. CIENA is under no obligation (and
expressly disclaims any such obligation) to update or alter its forward-looking
statements, whether as a result of new information, future events or otherwise.
CIENA, its directors, executive officers and certain other members of
management and employees may be soliciting proxies from Catena Networks
stockholders. Catena Networks, Inc., its directors, executive officers and
certain other members of management and employees may be soliciting proxies from
Catena stockholders.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT - PROSPECTUS RELATING TO THE
FOREGOING TRANSACTION THAT CIENA EXPECTS TO FILE WITH THE SEC BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. THE PROXY STATEMENT - PROSPECTUS AND OTHER
DOCUMENTS FILED WITH THE SEC BY CIENA MAY BE OBTAINED, WHEN THEY BECOME
AVAILABLE, FOR FREE AT THE SEC'S WEB SITE, WWW.SEC.GOV. THE PROXY
STATEMENT-PROSPECTUS AND THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE
FROM CIENA OR CATENA NETWORKS. REQUESTS TO CIENA MAY BE DIRECTED TO CIENA, 1201
WINTERSON RD., LINTHICUM, MD, 21090-2205, ATTENTION: INVESTOR RELATIONS.
REQUESTS TO CATENA NETWORKS MAY BE DIRECTED TO: CATENA NETWORKS, INC., 307
LEGGET DRIVE, KANATA, ON, K2K 3C8, ATTENTION: KEVIN FORBES, VP OF FINANCE.
CONTACT: CIENA Corporation
Press Contacts:
Denny Bilter or Aaron Graham, 877/857-7377
email: pr@ciena.com
Investor Contacts:
Suzanne DuLong or Jessica Towns, 888/243-6223
email: ir@ciena.com