<PAGE> 1
Filed by CIENA Corporation.
pursuant to Rule 425
under the Securities Act of 1933
Commission File No. 0-21969
Subject Company: Cyras Systems, Inc.
PRESS CONTACTS: Denny Bilter or Aaron Graham
CIENA Corporation
(877) 857-7377
email: [email protected]
INVESTOR CONTACTS: Suzanne DuLong or Jessica
Towns
CIENA Corporation
(888) 243-6223
email: [email protected]
CIENA EXTENDS THE REACH OF INTELLIGENT OPTICAL NETWORKING TO METROPOLITAN
NETWORKS WITH AGREEMENT TO ACQUIRE CYRAS
LINTHICUM, Md. and FREMONT, Calif. - DECEMBER 19, 2000 -
In the continuing quest to improve the fundamental economics of building and
operating service provider networks, CIENA Corporation (NASDAQ: CIEN) and Cyras
Systems, Inc. today announced that CIENA has agreed to acquire privately held
Cyras in exchange for 27 million shares of CIENA common stock. Cyras, based in
Fremont, Calif., is developing data-optimized optical switching systems for
metropolitan area network applications.
"A natural extension of CIENA's industry-leading CoreDirector(TM) product
family, Cyras' high-capacity, data-optimized next-generation SONET transport and
switching platform will deliver the economic benefits of optical networking
further toward the edge of service provider networks than ever before," said
Scott Clavenna, president of PointEast Research.
Clavenna continued, "This combination is compelling. Cyras brings a new element
to CIENA's LightWorks architecture story and expands CIENA's footprint at the
edge of the network, while CIENA brings its existing significant presence in
metropolitan optical transport networks, meaningful customer relationships, an
established sales channel and global service and support capabilities."
TRANSACTION TERMS
<PAGE> 2
Under the terms of the agreement with Cyras, CIENA will acquire all outstanding
shares of Cyras in exchange for 27 million shares of CIENA common stock. CIENA
also assumes $150 million of Cyras' outstanding convertible debt. Based on the
closing price of CIENA stock on December 18, 2000, the deal is valued at
approximately $2.6 billion.
CIENA intends to account for the transaction as a purchase and expects the
transaction to qualify as a tax-free reorganization. CIENA expects the
transaction will become accretive on a pro forma basis, during the latter half
of the Company's fiscal year 2002, assuming expected revenue and cost synergies,
as well as anticipated product pricing.
Prior to this announcement, the consensus of First Call estimates for CIENA's
fiscal year 2001 was $0.70. Assuming successful completion of this transaction
in the first calendar quarter of 2001, CIENA expects the transaction to be
dilutive to expected 2001 pro forma earnings per share by $0.19 to $0.22,
excluding one-time charges associated with the acquisition as well as
amortization of intangibles and deferred stock compensation costs.
The Board of Directors of CIENA and Cyras each have unanimously approved the
transaction. Subject to regulatory approvals and customary closing conditions,
CIENA expects this transaction to close in the first calendar quarter of 2001.
Morgan Stanley served as financial advisor to CIENA on this transaction
EXTENDING CIENA'S NETWORK PRESENCE
"Cyras complements CIENA's existing product set by extending CIENA's reach from
the core of the service provider network to the metropolitan access and
switching networks," said Patrick Nettles, CIENA's chairman and CEO. "With the
addition of the Cyras's K2 Trans-Metro Optical platform, CIENA believes it will
be able to enhance our strategic position as a pure-play next-generation
equipment provider and expand our addressable market opportunities in the
high-growth metropolitan area markets."
CIENA's CoreDirector and CoreDirector CI are intelligent optical switches
targeting the core of service provider networks. The addition of Cyras's K2(TM)
-- Trans-Metro Optical (TMO) platform to CIENA's CoreDirector family of
intelligent optical switches should provide CIENA with comprehensive,
synergistic, end-to-end capabilities for the creation and management of
customized services with unmatched scalability, agility and efficiency.
<PAGE> 3
Cyras's K2 is designed to deliver advanced provisioning and transport functions
to service provider's existing metropolitan networks enabling carriers to adapt
to rapidly changing, demanding and complex mixed-traffic environments.
"Through continued innovation, CIENA's been able to change the fundamental
economics of building service provider networks, making the core networks
simpler and therefore less costly to build and operate," said Alnoor Shivji,
Cyras founder, CEO and president. "Cyras' applied the same philosophy to
metropolitan area networks and we believe the combination of our efforts will
offer carriers a compelling alternative to legacy approaches."
CYRAS'S K2 TRANS-METRO OPTICAL PLATFORM
Cyras's K2 Trans-Metro Optical Platform is a data-optimized SONET transport and
switching platform that is designed to incorporate the functionality of digital
cross-connects, SONET Add/Drop Multiplexers, ATM service access multiplexers and
switches, Frame Relay access switches, DSLAMs, DWDM wavelength adapters and MPLS
switches in a single network element. By collapsing the functions of many
discrete platforms into one compact switch chassis with interchangeable line
cards, Cyras estimates carriers can realize an immediate 10 to 40-fold increase
in price/bandwidth efficiencies over current legacy network solutions.
"The K2 was the most impressive metro product I evaluated in 2000," said
PointEast Research's Clavenna. "It offers a combination of scalability from
OC-768 to VT1.5 service granularity, while providing metro operators with a
platform that can be deployed as a low-cost edge switch with extensive circuit
and data handling capabilities."
Cyras has shipped its K2 platform to four customers for trial thus far.
Commercial availability is expected in the first half of calendar 2001.
ORGANIZATION
Following completion of the transaction, Cyras will form a new CIENA division
focusing on multi-service access and switching, and all employees of Cyras will
become employees of CIENA. Alnoor Shivji, Cyras founder, CEO and president will
report to CIENA President and COO, Gary Smith. The sales efforts of both
companies will be combined in to CIENA's existing sales organization.
<PAGE> 4
LIVE WEB BROADCAST OF TELECONFERENCE CALL
In conjunction with this announcement CIENA will host a teleconference call with
investors and financial analysts to discuss its acquisition of Cyras on Tuesday,
December 19, 2000 at 8:30 AM (Eastern). The live broadcast of the discussion
will be available via CIENA's homepage at www.CIENA.com. An archived version of
the discussion will be available shortly following the conclusion of the live
broadcast on the Investor Relations page of CIENA's website at:
www.CIENA.com/investors.
ABOUT CIENA
CIENA Corporation's market-leading intelligent optical networking systems form
the core for the new era of networks and services worldwide. CIENA's
LightWorks(TM) architecture enables next generation optical services and changes
the fundamental economics of service-provider networks by simplifying the
network and reducing the cost to operate it. Additional information about CIENA
can be found at www.CIENA.com.
NOTE TO INVESTORS
This press release contains certain forward-looking statements based on current
expectations, forecasts and assumptions of the Company that involve risks and
uncertainties. Forward-looking statements in this release, including, but not
limited to CIENA's intent to account for the transaction as a purchase and its
expectation that the transaction to qualify as a tax-free reorganization,
CIENA's expectation that on a pro forma basis the transaction will become
accretive during the latter half of the Company's fiscal year 2002, assuming
expected revenue and cost synergies, as well as anticipated product pricing,
CIENA's expectation that this transaction to be dilutive to expected 2001
earnings per share by $0.19 to $0.22, CIENA's expectation that this transaction
will close in the first calendar quarter of 2001, CIENA belief that it will be
able to enhance its strategic position as a pure-play next generation equipment
provider and expand its addressable market opportunities in the high-growth
metropolitan area markets, that ability of the K2(TM) -- Trans-Metro Optical
(TMO) platform to provide CIENA with comprehensive, synergistic, end-to-end
capabilities for the creation and management of customized services with
unmatched scalability, agility and efficiency, the ability of K2 to deliver
advanced provisioning and transport functions to service provider's existing
metropolitan networks enabling carriers to adapt to rapidly changing, demanding
and complex mixed-traffic environments, the ability of the K2 product to
incorporate the functionality of digital cross-connects, SONET Add/Drop
Multiplexers, ATM service access multiplexers and switches, Frame Relay access
switches, DSLAMs, DWDM wavelength adapters and MPLS switches in a single network
element and to realize an immediate 10 to 40-fold increase in price/bandwidth
efficiencies over current legacy network solutions and the expected commercial
availability of K2 in the first half of calendar 2001 are based on information
available to the Company as of the date hereof. The Company's actual results
could differ materially from those stated or implied in such forward-looking
statements, due to risks and uncertainties associated with the Company's
business, which include the risk factors
<PAGE> 5
disclosed in the Company's Report on Form 10K filed with the Securities and
Exchange Commission on December 7, 2000. 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
obligation to update the information included in this press release, whether as
a result of new information, future events or otherwise.
CIENA, its directors, executive officers and certain other
members of management and employees may be soliciting proxies from Cyras
stockholders. Cyras, its directors, executive officers and certain other members
of management and employees may be soliciting proxies from Cyras stockholders.
INVESTORS ARE URGED TO READ THE PROXY STATEMENT - PROSPECTUS
RELATING TO THE FOREGOING TRANSACTION TO BE FILED WITH THE SEC BECAUSE IT WILL
CONTAIN IMPORTANT INFORMATION. THE PROXY STATEMENT - PROSPECTUS AND OTHER
DOCUMENTS FILED BY CIENA WITH THE SEC MAY BE OBTAINED WHEN THEY BECOME AVAILABLE
FOR FREE AT THE SEC'S WEB SITE, WWW.SEC.GOV. THE PROXY STATEMENT-PROSPECTUS AND
THESE OTHER DOCUMENTS MAY ALSO BE OBTAINED FOR FREE FROM CIENA. REQUESTS TO
CIENA MAY BE DIRECTED TO 1201 WINTERSON ROAD, LINTHICUM, MD. 21090, ATTENTION:
INVESTOR RELATIONS.
