GigOptix to buy transmission silicon developer Terasquare

GigOptix, Inc (NYSE MKT:GIG) has wasted no time committing some of the funds it recently raised for acquisitions, agreeing to acquire Korean communications semiconductor developer Terasquare Co., Ltd. The deal calls for GigOptix to pay approximately $4 million in cash to Terasquare's investors as well as an additional $1.15 million of Terasquare's debt and other liabilities. The company expects to close the acquisition by the end of this month.

Fabless Terasquare has focused on CMOS-based high-speed communications interface semiconductors for 100 Gigabit Ethernet as well as Fibre Channel and EDR Infiniband applications (see, for example, "TeraSquare unveils low-power 100G parallel CDR technology at ECOC"). The new assets will complement GigOptix's current silicon germanium expertise to combine high performance and low cost for emerging 100-Gbps applications, including future offerings based on PAM4 modulation, company executives assert. GigOptix expects to offer products that leverage forward error correction (FEC) and electronic dispersion compensation (EDC) once the new assets have been integrated as well.

In the shorter term, GigOptix plans to partner Terasquare's 100G quad clock data recovery device (CDR), which will be rebranded as the HXC42400, with its transimpedance amplifier (TIA) and laser driver (LD) devices.

"GigOptix's internal evaluation and 100GbE link testing, with the HXC42400, shows that the partitioning of the CDR function and its power dissipation away from the temperature-sensitive, high-performance vertical cavity surface-emitting [VCSEL] and photodetector [PD] circuit elements enables operation with our TIA and VCSEL drivers to 300 m using OM4 multimode fiber. This is a first in the industry," asserted Tom Kapucija, datacom marketing director at GigOptix.

Terasquare will maintain its presence in Seoul and be renamed GigOptix-Terasquare Korea (GTK) Co., Ltd. Dr. Jinho Park, CEO of Terasquare, will become vice president of CMOS products engineering and general manager of GTK Co., Ltd. Prof. Hyeon-min Ba, Terasquare's chairman, will become chairman of the Technical Advisory Board of GigOptix and a member of the board of directors of GTK Co., Ltd.

"We have a proven track record of acquiring and integrating companies in the most financially prudent manner," stated Dr. Avi Katz, GigOptix's chairman and CEO. "Each acquisition has served as a building block to generate continuous growth in our business. The acquisition of Terasquare is the next piece in our long-term plan of creating the industry's premier supplier of datacom high-speed chipset solutions.

"GTK Co., Ltd., will also serve as our hub for proliferation of our other high-speed connectivity and consumer electronics products," Katz added.

The announcement comes shortly after GigOptix closed a public offering of stock designed to raise money for acquisitions (see "GigOptix fills acquisitions war chest"). Mergers and acquisitions have been an essential part of the company's culture since Katz took over the former iTerra in 2007 (see "iTerra pushes ‘restart’ with new name, products"). Prominent acquisitions include Helix and Lumera (see "GigOptix continues evolution with Helix acquisition" and "GigOptix to go public through merger with Lumera"). The company also created a joint venture with Brazil's CPqD, BrPhotonics Produtos Optoeletrônicos LTDA, that focuses on combining GigOptix's Thin Film Polymer on Silicon (TFPS) technology and CPqD's silicon photonics expertise (see "GigOptix says silicon photonics order imminent for joint venture").

Based on the subsidies the Korean Government provided to Terasquare, GigOptix expects the acquisition to be neutral to accretive immediately upon closing.

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