Cortina Acquires Intel Optical Networking Biz
September 22, 2006
Cortina Acquires Intel Optical Networking Biz. Check it out:(Electronic News Via Thomson Dialog NewsEdge) Fabless analog and digital communications chip supplier, Cortina Systems, has acquired Intels optical network components businessin a cash deal worth$115 million, the companies announced today. Intel will retain a small equity stake in the business.
The deal adds Intels time division multiplexing (TDM) and optical components technology to Cortinas portfolio of IP routing and transport market products.
They have a fairly significant product, said Amir Nayyerhabibi, Cortinas CEO, who worked on Intels 286 processors at Intel earlier in his career. It brings in more than $100 million in revenues per year. The product from the Intel division falls into four separate categories which sold to telecom and networking equipment makers in North America and Asia. The Intel business and Cortina have shared many of the same customers.
Cortina will gain a few additional large customers through the deal and several smaller customers, Nayyerhabibi said. The smaller customers are those that sell through distribution channels, adding that element of the business to Cortinas operations.
Privately-held Cortina expects to take between 50 and 100 of Intels key employees in engineering, product testing/validation, operations, marketing and application engineering as part of the deal, according to Cortina's CEO. An Intel spokesman confirmed that many of the 120 Intel employees aligned with the transaction have received offer letters. Those who have not received offer letters may be redeployed within the chip giant.
Sunnyvale, Calif.-based Cortina plans to set up facilities in Folsom, Calif.; Raleigh, N.C.; and Asia to accommodate the new workers.
Cortina expects to leverage its existing relationship with TSMC to manufacture the Intel parts. Some of the technology is already on the TSMC process, Nayyerhabibi said, and some with other fabs. However, none of the technology was being manufactured at Intel fabs, he added.
Cortina said the acquisition will bring the company closer to its goal of becoming a leader in components for infrastructure routing, transport, and enterprise markets by making it the top provider of Ethernet framers, Ethernet PHYs, optical transport FEC framers, Ethernet over SONET service framers, and T1/E1 line interface units.
Cortina said it has also closed a $132 million rounding of funding led by a new investor, Institutional Venture Partners (IVP), and including other new investors, Alloy Ventures, Bridgescale Partners, Doll Capital Management, and Sofinnova Ventures. The round also included existing investors Canaan Partners and Morgenthaler Ventures.
Intel spokesman Len Schulwitz said that the deal reflects Intel's efforts to sharpen its focus on communications products that are aligned with its core business. Those include Intel Architecture processors, network processors, optical modules and modules for communications platforms.
Intel has been working on this sharpened focus all year, announcing plans to close its design office in Glasgow, Scotland http://www.edn.com/article/CA6333089.html?partner=enews and to discontinue the Ethernet MAC product designed as part of the effort. The facility was part of the Intel Communications Group's efforts around optical networking.
First announced in April, Intel has been reevaluating its business operations http://www.edn.com/article/CA6328802.html?partner=enews this year as part of a broad restructuring effort, which, in part, aims to reduce headcount through layoffs and sales of certain business units. Intel sold its handset processor business to Marvell http://www.edn.com/article/CA6347446.html?partner=enews&ref=nbenn&text=m
arvell+intel as part of this effort.
Copyright 2006 Reed Business Information. All Rights Reserved.
Related Tags: optical networking, partner enews, intel, Intel, cortina, Cortina
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