26 June 2003 San Diego, CA Lightwave -- Sorrento Networks Corp., supplier of intelligent optical networking solutions for metro and regional applications, today announced that it has entered into a definitive agreement to acquire LuxN Inc. of Sunnyvale, CA.
LuxN supplies intelligent optical access optical access products that combine coarse and dense wavelength division multiplexing (CWDM and DWDM) on the same platform and have patented in-wavelength management. The acquisition expands Sorrento's addressable market and broadens its blue-chip customer base by adding 25 customers, including Time Warner Telecom, Hawaii I-Net, Yipes Enterprise Services, and numerous universities.
The purchase price for the transaction will be a combination of stock, warrants, and cash, including some of the cash currently held by LuxN. The acquisition is contingent upon regulatory approval and certain closing conditions, including a minimum amount of net cash remaining in LuxN following distribution of the merger consideration. Warrants to purchase 400,000 shares of Sorrento will be issued to the Series A-1 Preferred stockholders of LuxN upon the completion of the transaction, which is expected to occur on or before August 8, 2003.
"We are delighted about our union with LuxN," sates Phil Arneson, chairman and chief executive officer of Sorrento Networks. "Our capital restructuring and its huge management distractions are behind us. This merger with LuxN is merely the first step in our growth strategy, which includes expanding our product line breadth, adding new customers, and penetrating new markets. The acquisition of LuxN provides Sorrento with complementary products, intellectual property, and employee talent to help execute our business plan and increase shareholder value," he adds.
"In addition to the positive impact on future revenues, the acquisition will enhance Sorrento's balance sheet with additional cash, marketable inventory, and an increase in stockholders' equity," contends Joe Armstrong, chief financial officer of Sorrento Networks. "Given the large investment that LuxN has made to develop its products and customer base--over $125 million in the past five years--Sorrento is fortunate to join with LuxN on such attractive terms."
"Joining forces with Sorrento Networks is absolutely the right thing for our customers, employees and investors," says Tom Alexander, president and chief executive officer of LxN. "Sorrento and LuxN have complementary attributes: Sorrento is strong in metro and regional core applications as well as the storage area networking (SAN) market, while LuxN excels in optical access and enterprise applications. The combined entity will be better positioned to compete with larger vendors and win new business as the telecom market recovers."