Pirelli invests in CyOptics

JULY 28, 2008 -- The Pirelli Group (search for Pirelli) and CyOptics Inc. (search for CyOptics) have formed a strategic alliance in integrated photonics.

The agreement foresees integration between PGT Photonics, the Pirelli Group's photonics company, valued at about $40 million including available cash, and CyOptics, a privately held US company which focuses on optical components based on indium phosphide technology. As part of the agreement Pirelli will participate in a CyOptics capital increase with a cash contribution of $20 million.

The alliance will combine CyOptics' expertise in InP-based lasers and detectors with PGT Photonics' investment in silicon-based photonics. The two companies will address products such as wavelength-tunable TOSAs, photonic integrated circuits (PICs), and other components aimed at improving flexibility and reducing the cost of optoelectronic communications.

Following the transaction, Pirelli will maintain an approximately 30% share in the new business, which will have annual revenue of about $80 million.

"This investment is coherent with Pirelli's strategy to grow in photonics through integration with other companies in similar businesses," Marco Tronchetti Provera, chairman of Pirelli, said. "We strongly believe in the potential of this transaction, which allows for joining two advanced and complementary technologies and creating a leading-edge company in the optical sector."

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