Good-Bye Cabletron, Hello Enterasys
Mark your calendars: Aug. 6 is expected to be a big day for Cabletron Systems
On that date, the telecommunications holding company plans to establish
Enterasys Networks Inc. as an independent company and to issue its shares of
Riverstone Networks Inc. common stock.
Enterasys is expected to trade on the New York Stock Exchange under the
ticker 'ETS' as of the distribution date. Cabletron and its existing ticker,
'CS,' will then cease to exist, the company said.
Cabletron added that in exchange for each two Cabletron shares, a shareholder
as of the record date is expected to receive two shares of Enterasys and 1.02
shares of Riverstone on the distribution date.
Cabletron said it plans to spin out Aprisma Management Technologies by Dec.
31, and its final private subsidiary, GlobalNetwork Technology Services (GNTS),
will eventually be 'sold or otherwise disposed of.'
The aim of the moves is to 'create independent `pure-play' operating
companies focused on high growth markets and to maximize shareholder value,'
Cabletron chairman and CEO Piyush Patel said in a press release.
Cabletron said it will distribute its Riverstone shares to shareholders of
record as of July 27 and it will infuse Riverstone with $120 million and cash
and strategic equity investments valued at roughly $15 million. The contribution
will raise Riverstone's cash balance to about $295 million, the company
In exchange, Riverstone will receive 7.1 million shares of Riverstone stock,
valued at about $135 million.
'The investments provide us with strategic value in terms of next-generation
technologies and marketing partnerships that will help to fuel our growth,'
Riverstone president and CEO Romulus Pereira said in a press release.
Riverstone, an optical-network-equipment company, also has a Data Over Cable
Service Interface Specification-qualified cable-modem-termination system among
its wares. Instead of marketing the CMTS directly to cable operators, partners
such as Terayon Communication Systems Inc. and Tellabs Inc. resell the equipment
under their own brand names.
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