Zhone buys DWDM/CWDM supplier Sorrento

Zhone Technologies has added additional optical networking capabilities to its communication equipment product line after announcing late Thursday (April 22, 2004) that it has acquired Sorrento Networks in a stock-for-stock transaction.

While many have moved away from optical networking, Zhone has headed full steam into the sector. The company's move started last year when it merged optical mesh networking equipment developer Tellium. Through its acquisition today of Sorrento, the company will add dense wave-division multiplexing (DWDM) and coarse WDM (CWDM) capabilities to its optical product line.

Under the terms of the agreement, Zhone will issue 0.9 of a share of Zhone common stock for each outstanding share of Sorrento common stock. Each option warrant, and other security to be exercised or is convertible into Sorrento common stock will be assumed by Zhone and could be exercised or converted into Zhone common stock, with appropriate adjustments based on the merger exchange ratio.

The transaction is subject to the approval of each company's stockholders, regulatory review as well as other customary closing conditions. The transaction is currently expected to close in the summer of 2004.

- Robert Keenan

CommsDesign.com