Sycamore Networks, Inc. (NASDAQ: SCMR), today announced that it has signed a definitive asset sale agreement to sell substantially all of the assets of its Intelligent Bandwidth Management business to a subsidiary of Marlin Equity Partners (“Marlin”) for $18.75 million, subject to certain adjustments and the assumption by Marlin of certain liabilities. The closing of the asset sale, which is subject to stockholder approval and other customary closing conditions, is expected to occur no later than the first quarter of calendar year 2013.
Under the terms of the definitive asset sale agreement, Marlin will acquire substantially all of the assets of the Company’s Intelligent Bandwidth Management product and service business, all support operations, and the Company’s research and development center in Shanghai, China. Marlin has agreed to make offers of employment to substantially all of the employees of the Intelligent Bandwidth Management business as of the closing of the asset sale. The Company’s Intelligent Bandwidth Management product portfolio includes optical networking and multiservice access products, which are widely deployed in a global customer base that includes Tier 1 service providers, government agencies, utility operators, and large financial enterprises. Upon the closing of the asset sale, John Scully, vice president of worldwide sales and support at the Company, will assume the role of president and chief executive officer of the new Marlin entity.
The Company also announced that it is accelerating its pursuit of strategic alternatives for IQstream®, which may include an asset sale or other business combination transaction, or the discontinuation of the marketing and development of IQstream. The Company further announced that in the near term it will take certain cost reduction actions associated with its IQstream business, including workforce reductions and other cost containment measures.
The Company also announced that its Board of Directors has approved the liquidation and dissolution of the Company pursuant to a Plan of Liquidation and Dissolution 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 disposition of the IQstream business to the extent those assets are not sold prior to the filing of the certificate of dissolution. The Plan further contemplates 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 additional distributions of any remaining cash to the Company’s stockholders. If the dissolution of the Company is approved, the Company 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.
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