Sycamore Networks Inc., a developer of intelligent optical networking technology, took its first step into the emerging metropolitan access market Tuesday, purchasing Sirocco Systems Inc. in a stock deal valued at about $2.9 billion.
stock price slumped 2.4 percent in the first hour of trading Tuesday. It is well off its 52 week high of 199 1/2.
Sirocco, a privately-held company based in Wallingford, Conn., develops and markets optical access aggregation, switching and network management products targeted at the metropolitan access market.
Sycamore will exchange its common stock for all of Sirocco’s outstanding shares and options. The transaction will be accounted as a pooling of interests and is expected to be completed in the first quarter of Sycamore’s fiscal year 2001. The acquisition has been approved by each company’s board of directors, but is also subject to various closing conditions, including clearance under the Hart-Scott-Rodino Antitrust Improvement Act and approval by the shareholders of Sirocco. A sufficient number of Sirocco shareholders have signed voting agreements to ensure the required approval for the transaction.
Sycamore said the acquisition will provide it with a comprehensive portfolio of multi-service optical networking products for the metro access market and will complement its existing product line of transport, switching and management products. The company said the combined product line will enable service providers to leverage the power of the intelligent optical core to deliver a broad range of services including: ATM, TDM, IP, DS3/E3 through OC-192/STM-64 and Gigabit Ethernet.
“Sirocco’s portfolio of next generation optical networking products will enable Sycamore to serve the unique service needs of the emerging metro access market and to expand and extend the reach of the intelligent optical network by providing an economical, high performance “on-ramp” to the intelligent optical core,” said Dan Smith, Sycamore’s president and chief executive officer.
Jonathan Reeves, president and chief executive officer of Sirocco, will assume the role of vice president and general manager of Sycamore’s newly created Optical Access Division, reporting directly to Smith. Sycamore said it will absorb all Sirocco employees.
Reeves said the deal is a natural move for Sirocco as both companies share a common focus. He added that the combined company will be able to quickly bring point-and-click provisioning to all segments of the intelligent optical network.
Sirocco’s recently announced products include an optical access device named Zephyr, an optical edge switch named Typhoon and an optical network management system named Tempest. Sirocco’s first products are expected to be available in the fourth quarter.