Triangle Limited
A $769 million bid from Ciena Corp. was enough to beat out Nokia Siemens and give the Maryland-based telecommunications equipment maker the victory in an auction to buy the optical networking and carrier Ethernet business of bankrupt Nortel Networks, the three companies announced Monday.
Ciena agreed to pay $530 million in cash and $239 million in convertible debt to purchase the division from Canada-based Nortel, the onetime Research Triangle Park cornerstone that has been selling itself off in pieces after declaring bankruptcy early this year.
With its winning bid, Ciena (Nasdaq: CIEN) agreed to fork over much more than the $522 million the company agreed to pay last month for the Nortel division. That “stalking horse” bid gave Ciena the right to match any competing bids in the court-mandated auction, which started Nov. 20 and lasted for three days.
The deal, which still must win approval from bankruptcy courts in Delaware and Nortel’s home province of Ontario, requires that Ciena hire at least 2,000 Nortel employees, which would essentially double Ciena’s work force.
The deal is expected to have only a limited effect on what’s left of Nortel’s operation in Research Triangle Park. Nortel’s RTP-based Enterprise Solutions unit is under contract to be sold to New Jersey company Avaya for $915 million. That deal is expected close next month.
Nortel (OTCBB: NRTLQ) currently has about 1,600 employees in RTP, where the company once employed 9,000. The telecommunications equipment maker entered bankruptcy after its business collapsed under a crushing debt load and sinking sales.
The result announced Monday marked the second time this year that Nokia Siemens has lost out on a bid for a piece of Nortel. Ericsson topped Nokia in an auction for Nortel’s CDMA business in July.
