Update: Nortel to Buy Sonoma Systems
Tim Arango
08/15/00 - 10:30 AM EDT
Updated from 8:44 a.m. EDT Nortel Networks (NT Quote) said Tuesday that it had agreed to buy privately held
Sonoma Systems, a provider of high-speed data services, in a stock deal valued at $540 million.
Under the terms of the deal, about $60 million worth of shares is payable only if Marina del Rey, Calif.-based Sonoma meets certain unspecified "business objectives" in the first year after the deal closes.
Nortel, a networking and optical systems company based in Brampton, Ontario, said the transaction is expected to close in the fourth quarter, and is expected to be positive for its earnings in 2001.
"We are taking our leadership in the high-performance optical Internet and extending it to the local Internet," said Steve Schilling, a Nortel executive, in a statement. "This acquisition represents another building block in our local Internet capabilities that will enable service providers to offer new, profitable services directly to businesses and consumers."
Nortel was up 1 1/8, or 1%, to 80 3/8 in early trading Monday.
