World Wide Packets to be sold
A Maryland telecom-equipment company plans to buy Spokane Valley-based World Wide Packets Inc. for roughly $290 million in cash and stock, the companies said Tuesday.
Ciena Corp. intends to keep the privately held company’s local operation, which employs about 80. The deal is expected to close this spring or summer, company representatives said.
Both companies offer equipment and software for wide-scale communication networks such as those used by telephone providers, cable companies and large corporations.
“It’s great for the Spokane market,” said Chad Whalen, World Wide Packets’ senior vice president of global sales and marketing. “Spokane is going to be one of the centers of excellence with Ciena in terms of technology.”
The deal, accepted by both companies’ boards but pending regulatory approval, calls for World Wide Packets to become a wholly-owned subsidiary of Ciena in exchange for about $200 million in cash and 3.4 million shares of Ciena common stock, valued Friday at $26.52. Ciena also would assume as much as $15 million in outstanding company debt.
Founded in 2000 by Spokane tech entrepreneur Bernard Daines, World Wide Packets claims it has sold more than 70,000 units to more than 100 customers in 25 countries. It employs 155 workers, with its engineering staff chiefly in Spokane Valley and San Jose, Whalen said.
Fifteen-year-old Ciena employs about 1,800 and had revenues of $779.8 million last year, said spokeswoman Nicole Anderson.
“The possibility for (staff) redundancy is always there in a situation like this, but until the deal is closed we’re not prepared to share any more information,” Anderson said.
Privately held World Wide Packets does not disclose financial information.
Headquartered in Linthicum, Md., Ciena also announced it has been awarded a multi-year contract to supply AT&T Inc. with World Wide Packets’ technology throughout its network. AT&T is taking on a “significant Ethernet-network-based evolution,” Anderson said.
The proposed acquisition is good news for Spokane-based venture capital firm Northwest Venture Associates, which along with other firms poured tens of millions into World Wide Packets.
“I think the fit between the two companies is absolutely fantastic,” said Northwest managing partner Tom Simpson, also a World Wide Packets board member.
World Wide’s technology facilitates “carrier-class” Ethernet networks used by cities and for-profit companies to transmit data or provide services. “It fills out our technology vision for next-generation networks,” Anderson said. “It’s become common knowledge at this point that most of the significant players, be they telecom or cable, are facing some user demand that’s forcing them to rethink how their network and their network infrastructure operates.”
Similarly, Ciena sells equipment to increase the capacity of long-distance fiber-optic networks, and transport systems for metro and wide-area networks, according to Hoover’s.
Since going public in 1997, Ciena has acquired at least 11 companies. The most recent was Internet Photonics in 2004 for $99.5 million.
Ciena’s stock, traded on the Nasdaq as CIEN, closed at $26.17 Tuesday, down 1.32 percent. It declined to $25 in after-hours trading.