MARTINSRIED/MUNICH, German, Oct. 18 -- Adva Optical Networking announced today it will acquire Covaro Networks Inc., a private Ethernet solutions company based in Richardson, Texas. Covaro is a vendor of intelligent Ethernet demarcation products for WAN applications that enable service providers to offer services over fiber, copper, SONET/SDH, DS3/DS1 and E3/E1. Adva will acquire all material Covaro Networks Inc. assets via a combination of shares and cash; $15 million will be paid in 2,024,190 to-be-issued shares of Adva common stock via a capital increase, and approximately $4 million will be paid in cash. Up to $5 million cash may also be paid based on achievement of sales and gross-margin targets for products developed by Covaroin fourth-quarter 2005 and fiscal year 2006. The acquisition is subject to typical closing conditions and is expected to close in January 2006. Most of Covaro's more than 50 employees will be integrated into Adva's North American organization, and its Richardson engineering facilities will become an additional Adva site. Adva, based in Germany, has a US office in Mahwah, N.J., as well as offices in Europe and Asia. The company said Covero will complement its Fiber Service Platform, a portfolio of optical networking products for the delivery of high-speed services and network infrastructure in metropolitan areas. For more information, visit: www.advaoptical.com