Ikanos attracts Alcatel-Lucent as a strategic investor

Broadband communications semiconductor and software supplier Ikanos Communications, Inc. (NASDAQ: IKAN) has announced a new $16.25 million round of funding that includes both Tallwood Venture Capital, the company’s largest existing investor, as well as a new strategic investor, Alcatel-Lucent (EURONEXT PARIS: ALU; NYSE: ALU). The relationship with the systems house extends beyond financing to include co-development of "ultra-broadband" products.

The respective investments will come via the purchase of Ikanos common shares in a private placement. Tallwood will buy $11.25 million and Alcatel-Lucent $5.0 million worth of shares at a price of $0.41 each. Alcatel-Lucent has agreed to loan Ikanos up to $10 million as well, while Tallwood has promised to buy an additional $11.25 million of common stock at the same $0.41 per share price at a future date as part of another offering that will be open to the company’s existing shareholders.

Ikanos says it plans to use the money for working capital and "general corporate purposes" as well as for capital expenditures.

Alcatel-Lucent is the company’s first strategic investor, according to Omid Tahernia, president and CEO at Ikanos. He confirmed that Alcatel-Lucent is an existing customer for several elements of the Ikanos chip portfolio, which includes but is not limited to VDSL, VDSL2 vectoring, the Neos G.fast platform now in prototype, and gateway devices (see, for example, "Ikanos touts 110 Mbps via Velocity-3 NodeScale Vectoring VDSL chipset" and "Ikanos offers new Fusiv gateway processors"). The product development collaboration also will be wide-ranging, Tahernia said without getting into specifics. He asserted products arising from the partnership would not be exclusively developed for Alcatel-Lucent.

Meanwhile, Tahernia said he is looking at "a certain set of strategies that would extend our core business." He hinted this could include an embrace of PON technology, which could leverage IP the company already has via its acquisition of Conexant’s broadband semiconductor line in 2009 (see "Ikanos to acquire Conexant's broadband chip line, including PON devices").

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