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11 April 2013

Avago to acquire CyOptics for $400m

Avago Technologies Ltd of San Jose, CA, USA and Singapore (a designer and supplier of III-V-based analog components for communications, industrial and consumer applications) has agreed to acquire CyOptics Inc of Lehigh Valley, PA, USA, which makes indium phosphide (InP)-based optical chips and components, for about $400m.

Avago believes that the acquisition of CyOptics will strengthen its fiber-optics product portfolio for emerging 40G and 100G enterprise and data-center applications, with CyOptics’ single-mode InP laser, receiver and photonics integration capability helping to extend its technology position.

Avago’s optical transceiver products currently primarily leverage vertical-cavity surface-emitting laser (VCSEL)-based technology. Avago also expects the acquisition to facilitate its establishment of a complementary optical components business, not only to serve growing segments of the access, metro and long-haul markets but also for the enterprise and data-center segments.

CyOptics designs, fabricates and packages a broad portfolio of optical component products across enterprise, data-center, access, metro and long-haul market segments. Its optical components are integrated into optical transceivers, transponders and line-cards. Leveraging its heritage from Bell Labs and Lucent, CyOptics has built a broad product portfolio and a customer base that includes the leading module and system OEMs, it is claimed. Revenue has more than tripled over the past three years, including rising by 21% from 2011 to about $210m in 2012.

CyOptics’ InP technology and optical manufacturing capability will accelerate Avago’s ability to capture next-generation 40G and 100G enterprise and data-center sockets, believes Avago’s president & CEO Hock Tan. “With CyOptics, we also see interesting revenue growth opportunities in delivering a broad range of proprietary components to the market,” he adds.

Avago has a strong position in the wired infrastructure market, comments CyOptics’ president & CEO Ed Coringrato, who thanks CyOptics’ founder Dr Erel Margalit, long-standing investors including Israel-based global venture capital firm JVP (Jerusalem Venture Partners) and recent partners TA Associates for their support and guidance over the past decade.

Avago intends to fund the transaction with cash on-hand. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the USA, and is expected to close during Avago’s fiscal third-quarter 2013.

Tags: Avago CyOptics InP PICs



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