<<Ciena/Nortel: Oh Yes, There's Overlap
October 7, 2009 | Craig Matsumoto | Comments (5)
Ciena Corp. (Nasdaq: CIEN) might want to downplay it, but in terms of revenues, the company would overlap substantially with the Nortel Networks Ltd. Metro Ethernet Networking (MEN) business.
Ciena repeatedly used the word "complementary" in discussing today's $521 million bid for MEN. (See ITU: Ciena Bids $521M for Nortel's MEN and Smith: Why Ciena Wants to Reign Over MEN .)
But when it comes to where each company makes its money, there's a lot of overlap, Heavy Reading analyst Sterling Perrin points out in a research note published today.
Looking at individual products, there's a lot of difference between Ciena and Nortel. Ciena's CoreDirector doesn't have an analogue inside Nortel, and Nortel has a multiservice Sonet/SDH business that Ciena lacks (more on that later).
But the companies share an interest in WDM transport. And in 2008, those products represented 53 percent of Ciena's revenues and 55 percent of Nortel's optical revenues, Perrin writes.>>
For the remainder of this article see:
lightreading.com
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IIRC, the acquisition of NTs Metro Ethernet capabilities will
double+ Ciena's revenues, and hopefully profits. With overlap
in ~50% of their business(WDM), some costs will need paring.
Unless other, new developments spur growth.
Woody |
