Tellabs filled in the metro gap into product line today, announcing it will acquire Ocular Networks for about $300 million in cash and an additional $55 million in options.

This acquisition will fit Ocular's Optical Service Xchange, in with Tellabs' flagship Titan digital cross-connect line.

“It really does give us a market to Tier 2 and Tier 3 [cities], which we just have not been able to scale down to,” said Richard Notebaert, president and chief executive officer of Tellabs.

The Ocular product also adds some capabilities to do sub-wavelength applications, which are increasingly popular in the international market, Notebaert said.

From a network perspective, the two companies will fit the OSX into metro area networks where it will feed traffic into the Titan 5000, said Edward Kennedy, president and CEO of Ocular.

Under terms of the deal, Tellabs will retain Ocular’s Reston, Va., headquarters. Kennedy will report directly to Notebaert.

Joan Ryan, executive vice president and CFO of Tellabs, said the company anticipates generating between $50 million and $100 million in revenue from the Ocular products in 2002, with most of that coming in the fourth quarter.