Sycamore Networks shutting down, sells optical business for $18.75M
Date:
2012-10-26 11:39:29
Author:10Gtek
Tag:
Sycamore Networks, Inc. (NASDAQ: SCMR) is throwing in the towel, starting with a definitive agreement to sell substantially all of the assets of its intelligent bandwidth management business to a subsidiary of Marlin Equity Partners for $18.75 million, subject to certain adjustments and the assumption by Marlin of certain liabilities. The company is also looking for a buyer for its IQStream product line, after which it will cease operations.
Marlin will acquire substantially all of the assets of the Sycamore’s intelligent bandwidth management product and service business, its support operations, and the company’s research and development center in Shanghai. Marlin has agreed to offer jobs to substantially all of the current Sycamore employees as of the closing, which is expected no later than the first quarter of 2013. John Scully, vice president of worldwide sales and support at Sycamore, will become president and chief executive officer of the new Marlin entity.
The intelligent bandwidth management product portfolio includes optical networking and multiservice access products, which are deployed in a global customer base that includes Tier 1 service providers, government agencies, utility operators, and large financial enterprises. The $18.75 million Sycamore will get for the assets is about $74 million less than it paid to acquire the Eastern Research multiservice access product line in 2006.
Sycamore also said it is stepping up its efforts to find strategic alternatives for IQstream, its radio access network business. Options include an asset sale or other business transaction, or the discontinuation of the marketing and development of IQstream. The company also said that in the near term it will reduce the costs associated with its IQstream business, including workforce reductions.
The board of directors has approved a plan to see the remaining operations of the company wound down following the completion of the asset sale. The Plan of Liquidation and Dissolution contemplates an orderly wind down of the company’s business affairs, which will include the disposal of the IQstream business (if those assets are not already sold); the sale or monetization of the company’s other remaining non-cash assets; the satisfaction or settlement of its liabilities and obligations, including contingent liabilities and claims; and distribution of any remaining cash to the company’s stockholders. If the dissolution of the company is approved, Sycamore also intends, following the filing of a certificate of dissolution, to close its stock transfer books and to discontinue recording transfers of its common stock.
“After careful consideration of the company’s strategic alternatives, we believe these actions are in the best interests of Sycamore’s stockholders, as well as its customers and employees,” said Daniel E. Smith, president and chief executive officer, Sycamore Networks. “We are pleased with Marlin’s decision to acquire our intelligent bandwidth management business operations, which will provide for continued support of our global customer base.”
On October 22, Sycamore’s board also approved a special cash distribution of $2.00 per share of common stock, which will be paid on November 12, 2012 to stockholders of record as of November 2, 2012.
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The above information is edited by 10GTEK.
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