Slide 1: CIENA Announces Intent to Acquire WaveSmith Networks
CIENA Announces Intent to Acquire Investor/Analyst/Press Briefings Boston, April 10, 2003 New York, April 11, 2003 Filed by CIENA Corporation Pursuant to Rule 425 Commission File No. 0-21969 Subject Company: WaveSmith Networks, Inc. CIENA Announces Intent to Acquire
Slide 2: Agenda
Agenda Background Transaction details CIENA Product Strategy: "Up, Out & Across" WaveSmith Corporate Overview
Slide 3: Proxy Statement/Prospectus
Investors are urged to read the proxy statement - prospectus relating to the foregoing transaction that CIENA expects to file with the SEC because it will contain important information. The proxy statement - prospectus and other documents filed with the SEC by CIENA may be obtained, when they become
Slide 4: Forward-looking statements
This presentation includes certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements in this document include statements about future financial and operating results and
Slide 5: Gary Smith, CIENA President, CEO
Gary Smith CIENA President, CEO
Slide 6: Background
Background WaveSmith Networks develops innovative, flexible Multiservice Switching products that enable carriers to build profitable networks. Based in Acton, MA, 98 employees Lead investors: Atlas Venture Bessemer Venture Partners Fidelity Ventures CIENA's existing relationship includes: Third-roun
Slide 7: Transaction Highlights
Transaction Highlights All outstanding WaveSmith common and preferred shares to be exchanged for approximately 36 million CIENA common shares, which includes shares to be issued for CIENA's investment in WaveSmith. Aggregate value of CIENA shares issued: $170, or ~$158 million, net of return on CIEN
Slide 8: The Optical Market Will Not Grow Again Soon...
The Optical Market Will Not Grow Again Soon... * Plus or minus $500M. **Plus or minus $700M. The total optical networking market consists of optical switches, core/metro/access DWDM, ADMs, DCSs, and next-generation metro switches. Sources: Based on industry analyst & CIENA estimates. 2000 = $27.0B 2
Slide 9: So What Does CIENA Do?
So What Does CIENA Do? Add MORE features for PTT and ILEC specific markets Expand our product portfolio UP, OUT and ACROSS to enable data- friendly multi-service networks Up the protocol stack into Layer 2 Out to the edge with access features and products Across our portfolio by offering integrated
Slide 10: Worldwide Multiservice Switch Market
Worldwide Multiservice Switch Market Source: Infonetics Research February, 2003 (In Billions)
Slide 11: Conservatively Viewed...
Conservatively Viewed... The global multiservice switch market declined ~40% between 2001 and 2002 and could fall 10+% to $2.1B in 2003 before stabilizing as carriers begin MPLS upgrades. Source: CIENA internal estimates. Analyst average based on figures from: Lehman, 3.03; CIBC/Dell'Oro, 1.03; InSt
Slide 12: Multiservice Switch Evolution Opportunity
Multiservice Switch Evolution Opportunity Source: CIENA internal estimates. Analyst average based on figures from: Lehman, 3.03; CIBC/Dell'Oro, 1.03; InStat, 3.03; JP Morgan/Dell'Oro, 2H02; Dell'Oro, 2.03.
Slide 13: Growing CIENA's Addressable Market
Growing CIENA's Addressable Market Source: CIENA estimates based on Dell'Oro, IDC, Vertical Systems, JP Morgan, and Lehman Brothers estimates. $0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 $4.5 2003 2004 2005 2006 (In Billions) Additional MPLS Available WaveSmith Available CIENA Optical Available
Slide 14: CIENA Is Broadening Solutions Through Partnerships
C I E N A CIENA Is Broadening Solutions Through Partnerships CoreDirector CoreDirector CI CoreStream & OADMs MetroDirector K2 ON-Center IXCs Emerging Carriers C I E N A Expanded Features & Customer Relations ILECs PTTs Customers ONLINE Metro ONLINE Edge ONI C I E N A Edge ATM Equipe WaveSmith Soluti
Slide 15: Tom Burkardt, Chairman, President, and CEO
Tom Burkardt Chairman, President, and CEO
Slide 16: Why Customers Choose WaveSmith
Why Customers Choose WaveSmith Flexible Layer 2 Switching + Foundation for Future Solving carrier tactical problems: feature parity + future and better Op/CapEx Innovative product for strategic vision Installed in LEC and Independent Carriers' Networks Switching customer traffic & generating carrier
Slide 17: Opportunity: Legacy Multiservice Switches
Opportunity: Legacy Multiservice Switches Over $20 billion of legacy multiservice gear in deployment Old Technology: tactical challenges, no strategic future Cannot offer OpEx relief & reduce CapEx simultaneously Cannot support ATM & Frame Relay evolution to MPLS Cannot economically leverage increas
Slide 18: Competitive Landscape
Nortel Passport 7480+15000 Cisco MGX 8850 + 7200 Cisco BPX + IGX Lucent CBX 500 + PSAX2300 Marconi ASX4000 + TNX210 Alcatel 7470/7670ESE + 7670RSP WaveSmith DN 7100 Competitive Landscape VC & Port Density PVC Density Per Module Revenue Generating Ports (DS3) WaveSmith DN 8100 128,000 Up to 2.05 mill
Slide 19: Innovation and Planned Evolution
Innovation and Planned Evolution Multi-Service + MPLS: Best-of-Both layer 2 Integrates native ATM, Frame Relay, Circuit Emulation and MPLS Enables cap & grow strategy: make today's networks profitable Provides foundation for the future Table Stakes: Reliability Designed for carrier environments: reg
Slide 20: DN Product Family
DN Product Family All Distributed Node (DN) models support: NxDS0 - OC48c/STM16 ATM, Frame Relay, CES & MPLS All cards are common to all shelf types 19"/23" rack mountable, NEBS & UL certification In-service software upgrade support & all hardware modules hot-swappable DN 2100 DN 4100 DN 7100 DN 810
Slide 21: Summary
Summary Large opportunity upgrading multiservice switch infrastructure Carriers Demand: design to grow & leverage technology curves ATM Switching, Frame Relay Services, Evolution to MPLS ... Economically leverage increases in optical core bandwidth & functionality Provide OpEx relief & reduce CapEx
Slide 22: We see opportunity
__we see opportunity