Infinera closes Coriant acquisition

Infinera (NASDAQ:INFN) has closed its previously announced $430 million acquisition of fellow optical transport systems specialist Coriant. Infinera issued 20,975,384 shares of its common stock to fulfill its stock obligations in the cash and stock deal for privately held Coriant, with approximately $154 million of an expected total of approximately $230 million in cash paid at the close. Coriant was owned by Marlin Equity Partners and Oaktree Capital Management.

Oct 1st, 2018

Infinera (NASDAQ:INFN) has closed its previously announced $430 million acquisition of fellow optical transport systems specialist Coriant (see "Infinera to purchase Coriant for $430 million"). Infinera issued 20,975,384 shares of its common stock to fulfill its stock obligations in the cash and stock deal for privately held Coriant, with approximately $154 million of an expected total of approximately $230 million in cash paid at the close. Coriant was owned by Marlin Equity Partners and Oaktree Capital Management.

In addition to a broad line of optical transport systems as well as the 8600 Smart Router Series (which expands the company’s play in mobile networks), Infinera gains approximately 2,100 employees, more than 1,600 patents, and more than 600 customers globally. The combined company will serve 9 of the top 10 global network operators and the top six global internet content providers, Coriant says. Mark Showalter, senior director, software product marketing at Infinera, estimates the company now is in the top five in terms of global optical network hardware market share.

In announcing the deal last July, Infinera said that Coriant’s metro core platforms would complement the metro access systems Infinera added via its acquisition of Transmode. However, both companies have data center interconnect platforms (the Cloud Xpress for Infinera and the Groove G30 for Coriant) as well as long-haul transport systems (the DTN-X family for Infinera and the hiT 7300 in the case of Coriant). Mark Showalter says that integration planning is “on track” and that no changes to either company’s product roadmap have been made at this early date. However, he said it’s reasonable to speculate that Infinera’s photonic integrated circuit (PIC) and/or Infinite Capacity Engine (ICE) coherent DSP technology could be applied to future generations of current Coriant platforms. Infinera cited the opportunity to apply vertical integration to Coriant’s platforms as a benefit when it announced the deal.

The acquisition closes a whirlwind history for Coriant, which Marlin Equity Partners assembled via the acquisitions of Sycamore Networks, Nokia Siemens Networks, and Tellabs, the last in 2013. Oaktree Capital Management made a significant investment in the company last year (see "Marlin Equity Partners makes room for Oaktree Capital on Coriant investor roster") and appears to have actively sought an acquirer.

Earlier today, Infinera refuted speculation from financial advisors MKM Partners that the company would have to issue more stock than planned to close the deal. Infinera also said that, while MKM predicted that the company would lose an RFP at CenturyLink to Ciena, CenturyLink has yet to decide on a supplier. MKM made the statements as it downgraded Infinera’s stock rating to “Sell” from “Neutral.”

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