21 August 2003 Linthicum, MD Lightwave -- CIENA Corp., has reached a definitive agreement to acquire privately held Akara Corp. A Delaware corporation with development facilities in Ottawa, Ontario, with approximately 50 employees, Akara develops equipment for SONET/SDH-based extended storage area networking (SAN), or storage-over-distance solutions for enterprises and carriers.
Akara's products are designed to reduce operational and capital expense by leveraging the existing SONET/SDH, dark fiber, or DWDM networks, and ensure the performance of Fibre Channel, ESCON, FICON, and Gigabit Ethernet in geographically dispersed business continuance applications. Akara has offices in Ottawa, Ontario and Dallas, TX.
Under the terms of the acquisition agreement, Akara will merge with a wholly owned subsidiary of CIENA, and all remaining outstanding shares of Akara common and preferred stock will be exchanged for an aggregate consideration of $45 million consisting of $31 million in cash and $14 million in shares of CIENA common stock. The number of CIENA shares to be issued will be determined based on the average closing price of CIENA common stock on the Nasdaq Stock Market on the 10 trading days preceding the closing date.
The transaction is subject to various conditions. The boards of directors of both CIENA and Akara, and the holders of a majority of Akara's stock, have approved the transaction. It is expected that this transaction will close during CIENA's fourth fiscal quarter 2003. The CIENA stock to be issued to Akara shareholders in the transaction has not been registered with the Securities and Exchange Commission or any state or Canadian authority and may not be offered or sold until they are appropriately registered unless an exemption from registration is available.
RBC Capital Markets was the sole advisor to Akara in relation to this transaction.