Sycamore Networks, Inc. (fka SCMR)

[flemsnopes]

Well, this is a fine kettle of fish! They're winding down and dissolving the company, with $2 per share payout on November 12th and additional payouts at later date(s) as warranted! Will this move actually be in the best interest of current shareholders? Today's action in SCMR should be interesting, to say the least, and we should quickly get some sense of just how much value knowledgeable parties place on the assets being put up for sale. Hold on to your hats, this ride could get bumpy today.

Sycamore Networks Inc SCMR:NASDAQ

Sycamore Networks Signs Definitive Agreement to Sell
Intelligent Bandwidth Management Business and Announces
Intent to Wind Down Remaining
Operations
BusinessWire
3:14 PM ET

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(R), 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.

On October 22, 2012, the Board of
Directors of the Company also approved a special
cash distribution of $2.00 per share of common stock, which
will be paid on November 12, 2012 to stockholders of
record as of November 2, 2012. In accordance with
NASDAQ Rule 11140(b), the ex-dividend date will be
November 13, 2012, the first business day following
the payment date for the cash distribution.


"After careful consideration of the
Company's strategic alternatives, we believe these
actions are in the best interests of Sycamore's
stockholders, as well as its customers and employees," said
Daniel E. Smith, president and chief executive
officer, Sycamore Networks. "We are pleased with
Marlin's decision to acquire our Intelligent Bandwidth
Management business operations, which will provide for
continued support of our global customer base."


Both the asset sale and dissolution are
subject to stockholder approval. The Company intends
to file a proxy statement with respect to a special
meeting of the Company's stockholders to seek stockholder
approval for each of the sale of the assets of its
Intelligent Bandwidth Management business and the
dissolution of the Company pursuant to the Plan of
Liquidation and Dissolution following the completion of the
asset sale and a final determination regarding the
Company's IQstream business. The Company's Board of
Directors unanimously approved the sale of the assets
of the Intelligent Bandwidth Management product and service
business to Marlin and the dissolution of the
Company and recommends that the Company's
stockholders vote in favor of the asset sale and the
dissolution.

Blackstone Advisory Partners
acted as financial advisor to the Company.