April 06, 2001, 12:50 PM — Optical start-up MAYAN Networks said it has entered into a definitive agreement to acquire remote access server maker Ariel.
The agreement calls for the acquisition of Ariel through a merger with and into Ariel, the companies said. Under the terms of the agreement, each outstanding share of privately held MAYAN common stock, and options and warrants to purchase MAYAN common stock, will be exchanged for securities representing 90% of the fully-diluted as converted shares of the combined company.
Holders of the MAYAN convertible notes are expected to be able to convert their notes into common stock of the combined company after the merger upon certain events. Current Ariel shareholders, option holders, and warrant holders will retain an approximate 10% interest in the combined company.
The companies did not disclose the value of the stock deal. Ariel had sales of $11.6 million last year and a market cap of $14 million.
MAYAN Networks' first product, the Unifier SMX, is designed to replace traditional SONET add-drop multiplexers and integrate the functionality of a digital cross-connect, frame relay switch, ATM switch and IP router. This design is intended to enable service providers to migrate to a converged voice, data and video network while retaining their investment in existing TDM infrastructures.
Ariel makes high-density, SS7-enabled dial-up access equipment for applications such as Internet access, corporate Intranet/Extranet access, online services, telecommuting, transaction processing and unified messaging.
"Ariel adds strength to MAYAN's existing strong suite: broad choices in access," says market research firm Current Analysis in a recent report. "Open systems-based RAS and SS7-enabled dial-access capabilities are complementary to MAYAN's access breadth as well as strategy of interoperability. Post acquisition, MAYAN can offer Internet, intranet and extranet access solutions that leverage its current strengths that feature interoperability with SONET environments."
The combined company will retain the MAYAN Networks name, and it is intended that it will be listed on the NASDAQ National Market. Ariel, which is based in New Jersey, currently trades on NASDAQ under the symbol "ADSP."
The company will be headquartered in San Jose, with offices in New Jersey, Texas, Arizona, France and Germany.
The transaction is expected to close no later than the third quarter of 2001.