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ADVA Optical Networking Enters Into Agreement To Acquire MRV Communications

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Strategic purchase aims to strengthen product portfolio and expand customer footprint

ADVA Optical Networking has announced that it has entered into a definitive agreement to acquire MRV Communications. Under the terms of the agreement, ADVA Optical Networking will make a tender offer of USD 10.00 per share for all the outstanding common stock of the California-based provider of innovative network solutions for data centre operators, service providers and enterprises. The offer equates to an aggregate purchase price of USD 69 million and has been approved and unanimously recommended by both the board of directors of ADVA Optical Networking and the board of directors of MRV Communications.

The acquisition is subject to customary closing conditions, including the tender of at least a majority of MRV Communications' outstanding shares of common stock. If successful, the acquisition will strengthen ADVA Optical Networking's portfolio of optical, Ethernet and software solutions and expand its customer base, especially in non-European regions. In 2016, MRV Communications recorded revenues of USD 80.3 million. For the quarter ending March 31, 2017, MRV Communications reported revenues of USD 21.2 million, cash and cash equivalents of USD 21.7 million and listed no debt.

"MRV Communications, Inc. is a company that shares many of our values. It's a company that has built a strong reputation focused on customer success and satisfaction. Over 29 years, it has driven some key innovations and played an important role in shaping our industry," said Brian Protiva, CEO, ADVA Optical Networking. "That's why we signed a definitive agreement to acquire it today. We believe there's a strong synergy between our two companies. MRV Communications, Inc.'s technology and talent will strengthen our own product set and help us to deliver even more value to our customers. Our combined teams present the marketplace with an incredibly compelling skill set and technology base."

ADVA Optical Networking's acquisition of MRV Communications, Inc. will, if completed, be the second significant acquisition it has made in as many years. In 2016, the company successfully acquired Overture Networks to strengthen its Carrier Ethernet portfolio and create one of the industry's most successful NFV product suites - Ensemble. Earlier this year, Ensemble was selected by Verizon to drive its virtual uCPE solution. ADVA Optical Networking's continued success across a range of customer segments led to the posting of record Q1 revenues in April 2017. ADVA Optical Networking's acquisition of MRV Communications, Inc. is subject to customary conditions and is expected to be completed in August or September of 2017.

"The networking industry is experiencing one of the most exciting and tumultuous phases in its history. The pace of innovation has never been faster or more demanding. To continue to exceed customer expectations and outperform network demands, we must use every possible advantage," said Uli Dopfer, CFO, ADVA Optical Networking. "Our acquisition of MRV Communications, Inc. will help us to do this. It not only strengthens our cloud access portfolio, but it also opens the door to new customers. There can be no question that this acquisition will present many new business opportunities, especially for communication service providers who are seeking to explore the possibilities of virtualized network services. Together, ADVA Optical Networking and MRV Communications, Inc. present an exciting networking force."

Cowen and Company, LLC is acting as financial adviser to MRV Communications. Norton Rose Fulbright LLP is serving as MRV Communications' legal adviser. Hogan Lovells is serving as ADVA Optical Networking's legal advisor.



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