ADVA Optical Networking Acquires Movaz Networks
Advances ADVA’s WDM market leadership and ROADM product portfolio
June 06, 2006
ADVA Optical Networking today announced the signing of a definitive agreement to acquire privately-held Movaz Networks Inc. Movaz is a leading Wavelength Division Multiplexing (WDM) equipment provider founded in 2000 and based in Atlanta, Georgia, USA. The Movaz RAYTM product line is a portfolio of WDM transport and Reconfigurable Optical Add-Drop Multiplexing (ROADM) solutions that economically scale from small metro core to regional networks as large as 2,000 km.
Movaz has an installation base of nearly USD 150 million across approximately 100 customers comprised of telecommunications carriers, cable network providers, research and educational organizations and government agencies. This customer base is served by a three pronged distribution strategy that includes direct sales, a private label partnership agreement with Lucent and several value added resellers. Movaz will provide a strong complement to ADVA Optical Networking’s Fiber Service Platform (FSP) solution portfolio and will significantly enhance ADVA Optical Networking’s business traction in the Americas.
Under the terms of the agreement, ADVA Optical Networking will acquire all outstanding shares and options of Movaz via a combination of shares and cash. 6,526,529 shares of ADVA Optical Networking common stock will be issued via a capital increase and a cash component of approximately USD 6.0 million will be paid. In addition, a cash earn-out component equivalent to 1.0 million ADVA Optical Networking shares could become payable within twelve months after closing under certain conditions. The acquisition is subject to various standard closing conditions and is expected to close in July 2006. Half of the newly to-be-issued shares will be tradable immediately upon issuance, and half six months thereafter.
A majority of Movaz's currently about 150 employees will be fully integrated into ADVA Optical Networking's North American organization and their Atlanta facilities will become an additional ADVA Optical Networking distribution and engineering site. On a U.S. GAAP basis, the company expects earnings per share accretion from mid-2007 onwards.
Brian L. Protiva, ADVA Optical Networking's chief executive officer, stated, "The acquisition of Movaz will expand ADVA Optical Networking’s North American customer base, global product portfolio and optical engineering resources. Their RAYTM product portfolio includes two ROADM solutions that enable dynamic networking with unparalleled functionality and cost points – exactly what customers are looking for today. The Movaz distribution partnerships, sales force and substantial U.S. customer base combine extremely well with ADVA Optical Networking’s. They will increase our leading position as a supplier of Optical+Ethernet solutions globally, which reflects the core of our strategy.”
“The fast paced growth of Movaz in recent years has driven the need for significant scaling of our current infrastructure and operations,” stated Bijan Khosravi, chief executive officer of Movaz Networks. “ADVA Optical Networking, with its global resources provides instantaneous access and support to a much broader customer base for the Movaz product line, especially in the EMEA region. The financial strength of ADVA Optical Networking will ensure ongoing innovation for the expanded Optical+Ethernet solutions portfolio. The synergistic combining of ADVA Optical Networking and Movaz will realize even greater values for our customers.”