Coherent Communications Merges With Tellabs

Tellabs and Coherent Communications announced a merger agreement under which Coherent Communications Systems Corporation of Ashburn, VA will become a subsidiary of Tellabs.

Under the terms of the agreement, all outstanding shares of Coherent stock will be exchanged at the ratio of 0.72 shares of Tellabs common stock for each share of Coherent common stock. Based on the closing price of Tellabs common stock on February 13, 1998, the transaction is valued at approximately $670 million. Excluding one-time transaction costs of two cents-to-three cents per share, modest earnings-per-share accretion is expected during 1998 and 1999.

At present, both the Tellabs and Coherent product lines will be maintained to ensure that the needs of existing customers are met. Following the merger, the combined company will launch new product development.

Coherent designs, manufactures and markets echo cancellation, voice enhancement, and conferencing products for telecommunications companies, cellular and PCS providers, and network operators.

Tellabs designs, manufactures, markets and services voice/data transport and access systems.