November 29, 1999 4:25 AM PST
Redback to buy Siara Systems for $4.3 billion
With its acquisition of Mountain View, Calif.-based Siara Systems, Redback Networks hopes to leverage the optical networking equipment and software being developed by Siara Systems to provide more network services. Siara has yet to officially unveil any products or earn any revenue.
"We expect the combination of Siara Systems and Redback to create a powerful supplier in the communications industry, focused on serving the next generation access and service creation requirements of carriers and service providers," said Dennis Barsema, Redback's chief executive, in a statement.
Redback, which more than tripled at its initial public offering in May, provides hardware and software to telecommunications companies to help connect copper phone lines and cable networks to the Internet.
The transaction is based on Redback's Friday closing price of 136.5. Redback, based in Sunnyvale, Calif., will issue 31.3 million shares for all outstanding shares, options and warrants of Siara Systems. Redback stockholders will own 62 percent of the new entity, and Siara stockholders will own 38 percent.
The merged company will retain the name of Redback Networks, and global headquarters will remain in Northern California.
Barsema will stay on as chief executive officer of Redback, while Vivek Ragavan, Siara's chief executive, will become Redback's chief operating officer.
All other Redback and Siara personnel are expected to continue with Redback. Upon completion of the merger, Siara board members Vinod Khosla, a general partner at Kleiner Perkins Caufield and Byers, and Ragavan will join Redback's board of directors. One additional board member will be named.
The merger is subject to various closing conditions, including approval by the stockholders of each company and approval under the Hart-Scott-Rodino Antitrust Improvements Act.