Zhone Technologies has acquired San Diego-based Sorrento Networks in a all stock transaction. The move will add Sorrento's dense wave-division multiplexing (DWDM) and coarse WDM (CWDM) to its product line. The deal is worth approximately $37M based on Zhone's Thursday closing price and number of outstanding shares. The company had a loss of $17.6M ON revenues of $25.4M in fiscal 2004.