After a short battle with Nokia Siemens Networks, who claimed that it had a better offer of $810 million, Ciena was able to muscle its way into acquiring Nortel's Metro Ethernet Network (MEN) and related optical assets $769 million bid in cash and convertible notes.
Through the deal, Ciena immediately jumps into the third spot of top ten optical vendor ranking, trailing Huawei and Alcatel-Lucent. What's more, Ciena gets access to a host of new customers, including Verizon, which just lit up a 100 Gbps route on a major European network route.
However, Ciena's pending purchase of Nortel's MEN unit has drawn some concern from the financial analyst community who are unsure the deal will be a success or failure. Arguing that the acquisition 'will weigh down Ciena's operations,' the challenge will lie in its ability to integrate a company with $1 billion in annual revenues.
Ciena's CEO Gary Smith, maintains in a Reuters article that while "it is a large integration (but) made easier by the fact that it's such a good fit." Understanding whether or not Ciena's acquisition of Nortel's optical unit will be a success or failure is still unclear.
For Nortel, the sale of its profitable MEN unit is just one of many sad ends for the troubled Canadian vendor, whose former CEO and Chairman Mike Zaiforovski decided the better route was to sell off its assets in what could be called a bargain basement sale after it could not find a way to emerge out of Chapter 11 bankruptcy protection.