Some five years after acquiring Nortel's MEN business, Ciena is making another significant acquisition of a competing vendor.
The vendor has announced a definitive agreement to acquire Cyan in a move that will take the company much deeper into the world of on-demand networking and services.
Cyan made its early mark in metro packet-optical where their gear is a favorite of alternative carriers, although gaining the favor of larger network operators has proven just as daunting as one might have expected. There is likely some technology and customer overlap there for the two companies to work through.
But of late, Cyan's main push has been in the SDN and NFV arenas, where they have been finding more and more success building their Blue Planet software portfolio and the Blue Orbit multi-vendor ecosystem along with it. Ciena has been following a parallel path, but the acquisition of Cyan's technology and talent could give Ciena's own software and services efforts a significant boost.
This is a pivotal year in the development of both SDN and NFV, as the industry shifts its attention from the drawing board into the field. By merging the two ecosystems, Ciena hopes to stake a claim to a bigger wedge of a pie whose true size has yet to be revealed.
The deal is a cash (11%) and stock (89%) transaction valued at $400 million, paying some $4.75 per share for Cyan's shareholders based on a 20-day volume weighted average price of Ciena's stock price. The deal should close during Ciena's fiscal Q4, which ends on October 31, 2015.
This article was authored by Rob Powell and was originally posted on Telecomramblings.com
Rob Powell is founder & editor of Telecom Ramblings, which was set up in 2008. The website is dedicated to discussing trends and developments in the telecom industry.