Filed by Sycamore Networks, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Commission File Number: 333-25853
Subject Company: Sycamore Networks, Inc.
The following communications contain forward-looking statements based on
current expectations, forecasts and assumptions that involve risk and
uncertainties that could cause actual outcomes and results to differ
materially. These forward-looking statements include, but are not limited
to, future product, market and technology development, future benefits of
the merger, estimated date to complete the transaction, and the expected
impact of the transaction on future earnings. These risks and uncertainties
include difficulties in the assimilation of operations, technologies and
products of Sirocco, diversion of management's attention from other
business concerns and risks of entering new markets.
For a further list and description of such risks and uncertainties that
could cause actual results to differ materially from such forward-looking
statements, see the reports filed by Sycamore with the SEC.
Investors and security holders are advised to read the documents filed by
Sycamore with the SEC regarding the business combination transaction
referenced in the foregoing information when they become available because
they will contain important information. Investors and security holders may
obtain a free copy of the documents regarding the referenced business
combination transaction (when available) and other documents filed by
Sycamore at the SEC's web site at www.sec.gov. The documents regarding the
referenced business combination transaction and such other documents may
also be obtained from Sycamore by directing such request to Sycamore
Networks, Inc., Attn: Terry Adams, Investors Relations, 10 Elizabeth Drive,
Chelmsford, MA, 01824.
THE FOLLOWING IS THE PRESS RELEASE DISSEMINATED BY SYCAMORE ON JUNE 6, 2000
CONTACT:
Press Inquiries Investor Inquiries
Rich Williams Terry Adams
Sycamore Networks Sycamore Networks
978-250-2909 978-250-3410
[email protected] [email protected]
SYCAMORE NETWORKS TO ACQUIRE SIROCCO SYSTEMS
ACQUISITION BROADENS SYCAMORE'S REACH INTO EMERGING METRO ACCESS MARKET
CHELMSFORD, Mass., June 6, 2000 -- Sycamore Networks, Inc. (NASDAQ: SCMR), a
leader in intelligent optical networking, today announced a definitive
agreement to acquire privately-held Sirocco Systems, Inc. based in
Wallingford, Connecticut. Sirocco develops and markets optical access
aggregation, switching and network management products targeted for the
metropolitan access market.
Under the terms of the agreement, Sycamore common stock will be
exchanged for all outstanding shares of Sirocco and Sycamore will assume
the outstanding options of Sirocco. Based upon the closing price of
Sycamore's common stock on June 5, 2000, the deal is valued at
approximately $2.9 billion. This transaction will be accounted for as a
pooling of interests and is expected to be completed in the first quarter
of Sycamore's fiscal year 2001. The acquisition has been approved by the
Board of Directors of each company and is subject to various closing
conditions, including clearance under the Hart-Scott-Rodino Antitrust
Improvement Act and approval by the shareholders of Sirocco. A sufficient
number of Sirocco shareholders have signed voting agreements to ensure the
required approval for the transaction.
"Intelligent optical networking technology is rapidly being deployed
throughout every segment of the public network from access to backbone, to
address network scaling issues and data service requirements created by the
tremendous growth in data traffic," said Dan Smith, Sycamore's president
and CEO. "Sirocco's portfolio of next generation optical networking
products will enable Sycamore to serve the unique service needs of the
emerging metro access market and to expand and extend the reach of the
intelligent optical network by providing an economical, high performance
"on-ramp" to the intelligent optical core."
According to Pioneer Consulting , the Global Optical Networks Edge
market which includes next-generation SONET, metro DWDM, converged metro
optical platforms, and metro optical IP systems is expected to grow to
$17.3 billion by 2004.
Sirocco will provide Sycamore with a comprehensive portfolio of
multi-service optical networking products for the metro access market.
Complementing Sycamore's existing product line of transport, switching and
management products, the Sirocco product suite will extend the range and
reach of services supported by the intelligent optical network. With this
combined product line service providers will be able to leverage the power
of the intelligent optical core to deliver a broad range of services
including: ATM, TDM, IP, DS3/E3 through OC-192/STM-64 and Gigabit Ethernet.
Sirocco's recently announced products include Zephyr, an optical access
device, Typhoon, an optical edge switch, and Tempest, an optical network
management system. First products from Sirocco are expected to be available
in the fourth calendar quarter of 2000.
Jonathan Reeves, president & CEO of Sirocco will assume the role of
vice president and general manager of Sycamore's newly created Optical
Access Division, reporting directly to Dan Smith, Sycamore's president and
CEO. In addition, all Sirocco employees will become employees of Sycamore.
"This is a natural move for Sirocco, both companies share a common
focus on putting intelligent optical networking technology to work to
develop, provision and manage new high performance services," said Jonathan
Reeves, President and CEO of Sirocco, " and, like Sycamore, we have also
taken a software-centric approach to developing our products combining
industry innovations in hard-optics with our own unique soft-optics
technologies. Combined we will be able to bring point-and-click
provisioning to all segments of the intelligent optical network quickly --
access to core."
ABOUT SIROCCO
Sirocco is an optical networking company focused on delivering third
generation solutions to service providers that allow them to derive new and
enhanced services from their optical core networks. Sirocco solutions
introduce a suite of new networking platforms that offer multi-service,
multi-wavelength switching functionality, coupled with innovative service
provisioning and management tools, which unleash the power of the optical
core. Founded in January 1999, the company is located in Wallingford,
Connecticut. For more information, please visit Sirocco's web site at
www.siroccosystems.com. The information on this website is not incorporated
into this press release.
ABOUT SYCAMORE
Sycamore develops and markets intelligent optical networking products
that transport voice and data traffic over wavelengths of light. The
Company combines significant experience in data networking with expertise
in optics to develop intelligent optical networking solutions for network
service providers. Sycamore's products are based on a common software
foundation, enabling concentration on the delivery of services and
end-to-end optical networking. Sycamore's products and product plans
include optical transport, access and switching systems and end-to-end
optical network management solutions. Contact Sycamore at
www.sycamorenet.com. The information on this website is not incorporated
into this press release.
###
Investors are urged to read documents relevant to the acquisition described
in this announcement that are filed with the Securities and Exchange
Commission because they contain relevant information about the acquisition.
You can obtain the relevant documents that are filed with the Commission
for free on the Securities & Exchange Commission's website at
http://www.sec.gov or from Sycamore.
Except for the historical information contained herein, we wish to caution
you that certain matters, including statements about the value of the
agreement, discussed in this news release constitute forward-looking
statements that involve risks and uncertainties. The Company's actual
results could differ materially from those stated or implied in
forward-looking statements due to the a number of factors, including risks
associated with the transaction, such as difficulties in the assimilation
of operations, technologies and products of Sirocco, diversion of
management's attention from other business concerns, risks of entering new
markets and those risks and uncertainties discussed under the heading `Risk
Factors' contained in the Company's Registration Statement on Form S-1
(file no. 333-30630) and the other reports filed by the Company from time
to time with the Securities and Exchange Commission. Forward looking
statements include statements regarding the Company's expectations,
beliefs, intentions or strategies regarding the future and can be
identified by forward-looking words such as "anticipate," "believe,"
"could," "estimate," "expect," "intend," "may, "should," "will," and
"would" or similar words. The Company assumes no obligations to update the
information included in this press release.
###
THE FOLLOWING IS THE SCRIPT OF A TELEPHONE CONFERENCE CALL
WITH ANALYSTS AND OTHERS HELD ON JUNE 6, 2000
SIROCCO CONFERENCE CALL
Ladies and Gentlemen, thank-you for standing by. Welcome to the
Sycamore/Sirocco conference call. At this time, all participants are in a
listen only mode. Later, we will conduct a question and answer session. At
that time, if you have a question, you can push the one on your telephone.
As a reminder, this conference is being recorded, Day date. I would like to
turn the conference over to Terry Adams, Vice President of Investor
Relations with Sycamore Networks. Please go ahead Terry.
Good afternoon ladies and gentlemen and welcome to the Sycamore/Sirocco
conference call. This is Terry Adams, Sycamore's Vice President of Investor
Relations. With me today are Dan Smith, our President and CEO, Frances
Jewels, our CFO, Kevin Oye, our VP of Business Development and Jonathan
Reeves, President and CEO of Sirocco Systems.
Dan will begin today's call by reviewing the strategic and business
rationale for the acquisition of Sirocco Systems and Frances will summarize
the financial and accounting issues. We will then take questions.
The announcement of today's transaction was distributed at approximately 6
am this morning via Business Wire and First Call. A copy of the press
release can also be retrieved from of our web site at www.sycamorenet.com.
At this point I would like to note that the matters we will be discussing
today may include forward looking statements and as such are subject to the
risk and uncertainties that we discuss in detail in our most recently filed
Form S-1 with the SEC. It identifies important risk factors that could
cause actual results to differ from those contained in the forward-looking
statements. I'll now turn the call over to Dan Smith who will discuss
business combination.
Thank you, Terry. I am pleased to announce that Sycamore has reached an
agreement to acquire Sirocco Systems of Wallingford, Ct., a leading
developer of metro Intelligent Optical Access solutions. Currently the
Metro market has two significant segments, Metro Core and Metro Access.
Sirocco Systems extends SCMR product portfolio, by combining Siroccos
leading metro access solution with SCMR's strong metro Core solution, the
SN 8000 MC, which began shipping early this year. The addition of Sirocco
metro access edge solutions now provides SCMR with a complete intelligent
optical networking portfolio extending from the edge of the enterprise
across the metro access and core networks and through the regional and long
haul backbones, combining both transport and intelligent optical switching
solutions.
The addition of the Sirocco product line significantly expands the market
opportunity addressed by Sycamore and markedly broadens the solution we can
offer our customers. According to Pioneer Research, the market for Metro
Core products is estimated to be approximately $2.3 Billion by 2004. The
market for Metro Access products is estimated to be nearly $17.3 billion in
the same year. Sycamore will now participate in both these growing markets.
Sirocco has created an innovative family of optical edge products. They
consist of Zephyr, the optical access device, Typhoon, the optical edge
switch, and Tempest, a comprehensive network management platform. Zephyr
and Typhoon are universal platforms, supporting TDM, ATM and packet based
IP services. Sirocco's unique approach allows a single platform to support
multiple services. Existing competitors optical edge products are optimized
to support a single service, in other words, they optimally support either
ATM, IP or TDM. Single focus products are inherently easier to develop, but
do not offer service providers the high level of flexibility that universal
platforms do. In addition to supporting multiple services, the Zephyr and
Typhoon products support the widest range of interfaces and the highest
density available in the industry with the smallest footprint.
Equally impressive is the switching capability inherent in the Sirocco
product line along with the distributed intelligence in the switches and in
the network management system. Zephyr, Typhon, and Tempest complement and
augment SCMR's already strong optical switching products and technology by
extending switching and intelligence to the edge of the optical network.
Zephyr and Typhon support a broad set of interfaces, including not only
DS3, OC-3/12/48, but also OC-192 and Gigabit Ethernet. Furthermore, Typhon
packs 360 DS-3s into a 7 foot bay, the most of any product announced to
date.
First products from Sirocco are expected to be available in the fourth
quarter of CY 2000.
Both Sirocco and Sycamore realized early on that while maximizing optical
bandwidth is important, both companies believe that it is much more
important to create services which generate revenue for service providers.
Both companies realized the value of incorporating switching and
intelligence into their respective products. Even though the concept was
pioneered by SCMR, Sirocco understood and shared our vision of the power of
"Soft Optics" which introduces intelligent routing, control and management
capabilities into the Optical Network, fundamentally changing the value
proposition of the optical domain from dumb pipes to revenue generating
services. The management of the Sirocco products will be easily
accomplished through the integration with SCMR's industry leading SILVX
network management platforms. The addition of Sirocco allows SCMR to extend
the vision and capabilities of Intelligent Optical Network to the edge of
the optical network. No longer will there be pockets of non-intelligent
resources or capacities. All areas of the network will contribute to
services and revenue creation.
In addition to the unique product architecture, Sirocco represents a world
class team of 125 networking professionals with a successful track record
of developing innovative new products at companies such as sahara networks,
cascade and ascend. Jonathan Reeves and his team have executed extremely
well and we believe that the combination of their products and people with
those of SCMR represents the strongest team and Optical Networking
portfolio in the industry.
And now I would like to spend a moment on the business structure. SCMR
recently formed several business units within the company to focus on key
product initiatives and market opportunities. These are Switching,
Transport and Ultra Long Haul transport. These business units have all the
development and product management resources necessary for success in their
respective markets. A central engineering unit was also created to provide
unified routing and signaling technology and network management across the
product lines. In addition central engineering will ensure that leading
edge optical and other technologies will be shared and re-utilized across
all business units through the Company's CTO office. SCMR retains central
Sales, General and Administrative, Operations and Marketing organizations,
which will support all of the business units. Sirocco will join the SCMR
organization as the Optical Access Products business unit and will be
headed by Jonathan Reeves, currently CEO of Sirocco, who will be VP and GM
of this unit reporting to me. We do not expect any reduction in headcount
at Sirocco as a result of this merger.
At this point, I will turn the call over to Frances Jewels, our CFO who
will address some financial details of the transaction.
Thanks Dan.
I will briefly summarize the financial and accounting issues associated
with the acquisition of Sirocco. Sycamore has agreed to exchange
approximately28.4 million shares of its common stock for all outstanding
Sirocco shares and to assume all outstanding options. Based on the closing
price of $102.94 for Sycamore stock on June 6, 2000, the transaction is
valued at approximately $2.9 billion.
The acquisition will be treated as a pooling of interests and is expected
to be completed in Sycamore's first fiscal quarter of fiscal 2001. The
transaction is subject to customary closing conditions and regulatory
approvals, including Hart Scott Rodino, and the approval of Sirocco
shareholders. Both Sirocco's and Sycamore's Boards of Directors have
already approved the execution of the definitive merger agreement.
On the financial side, we expect that this transaction will become
accretive in mid FY 2002.
I'll now pass the call back to Terry who will open it to your questions.
