June 5, 2006 Chicago, IL Mahwah, NJ Martinsried/Munich, Germany -- ADVA Optical Networking has signed a definitive agreement to acquire privately held Movaz Networks Inc. for a combination of cash and stock. Movaz develops and distributes WDM equipment
Movaz is founded in 2000 and based in Atlanta, GA. Its RAY product line is a portfolio of WDM transport and ROADM products that scale from small metro core to regional networks as large as 2,000 km.
Movaz has an installation base of nearly $150 million across approximately 100 customers comprising telecommunications carriers, cable network providers, research and educational organizations, and government agencies. This customer base is served by a distribution strategy that includes direct sales, a private label partnership agreement with Lucent, and several value-added resellers. The Lucent partnership last year accounted for 20% of Movaz's sales, according to Movaz sources contacted at Globalcomm in Chicago
Under the terms of the agreement, ADVA will acquire all outstanding shares and options of Movaz via a combination of shares and cash. ADVA will issue 6,526,529 shares of common stock via a capital increase and a cash component of approximately $6.0 million will be paid. In addition, a cash earn-out component equivalent to 1.0 million ADVA shares could become payable within 12 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 current employees (which number approximately 150) will be integrated into ADVA's North American organization and their Atlanta facilities will become an additional ADVA distribution and engineering site. On a U.S. GAAP basis, ADVA expects earnings per share accretion from mid-2007 onwards.
Brian L. Protiva, ADVA's chief executive officer, stated, "The acquisition of Movaz will expand ADVA's North American customer base, global product portfolio and optical engineering resources. Their RAY 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'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, 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 will ensure ongoing innovation for the expanded Optical+Ethernet solutions portfolio. The synergistic combining of ADVA and Movaz will realize even greater values for our customers."