Telecom Maker Ciena to Buy Cyras for $2.3 Billion; Stock Drops 24%

Telecommunications equipment maker Ciena Corp. said it would buy Cyras Systems Inc. for $2.3 billion in stock, a move that could boost its networking sales in cities where fast Internet connections are in high demand. Ciena said the deal will cut sharply into its earnings in the current fiscal year, and its stock fell $23.19, or 24%, to $73.19 after the announcement. Analysts said, however, that the deal will position Ciena to compete directly with networking-industry leader Cisco Systems Inc. Once a takeover target itself, Ciena is coming off a strong fourth quarter, and earlier this month boosted its profit outlook at a time when many telecommunications and technology companies were suffering. The acquisition gives Ciena control of privately held Cyras’ K2 system, which can branch out lightning-fast fiber-optic networks to individuals and businesses in cities, a highly coveted market.