TranSwitch to acquire Mysticom
December 7, 2005 Shelton, CT -- TranSwitch, a provider of high-speed semiconductor platforms for the communications industry, has entered into a definitive agreement to acquire Mysticom, a privately-held developer of multi-Gigabit Ethernet transceivers. With the acquisition, TranSwitch says it gains in-house capability to integrate high-speed SerDes and PHY technology into its future Envoy, PHAST, and EtherMap series of Carrier-class Ethernet products.
December 7, 2005 Shelton, CT -- TranSwitch, a provider of high-speed semiconductor platforms for the communications industry, has entered into a definitive agreement to acquire Mysticom, a privately-held developer of multi-Gigabit Ethernet (GbE) transceivers. With the acquisition, TranSwitch says it gains in-house capability to integrate high-speed SerDes and PHY technology into its future Envoy, PHAST, and EtherMap series of Carrier-class Ethernet products.
"Integrated SerDes capabilities in our PHAST-12N, EtherPHAST-48 Plus, PHAST-48V, and VTXP-48 have been a strong differentiator for us. We acquired SerDes intellectual property [IP] for these products from third parties. As we move into our next series of Envoy, PHAST, and EtherMap products with 10-Gigabit SONET/SDH and Ethernet interfaces, we need to continue to integrate SerDes and PHY functions. External IP for 10 Gigabit SerDes and PHY is not readily available, and Mysticom's proven capability in analog/mixed-signal design and in these technologies will enable TranSwitch to continue it strategy of integrating SerDes and PHY capabilities in its next-generation products," comments Santanu Das, president and CEO of TranSwitch.
Mysticom, a fabless semiconductor company, currently develops 10-GbE transceivers for providing interconnect performance over a variety of cable media, compliant with CX4, LX4, and XAUI standards, designed to enable low-power consumption in very small form factors. TranSwitch says it will continue to market and support these products while integrating these functions into its future higher-speed devices for Carrier-class applications. Mysticom also markets IP cores for Fast Ethernet and GbE PHY applications. TranSwitch says it will also continue to support these activities.
"We are delighted to join the TranSwitch team," comments Neil Vasant, CEO of Mysticom. "TranSwitch has an unmatched portfolio of Carrier-class Ethernet controllers, and Mysticom's PHY technology complements TranSwitch's strengths in this area. The synergy in our respective spheres of expertise will enable TranSwitch to extend its leadership in the Carrier-class Ethernet market."
TranSwitch is expected to acquire the Israel-based Mysticom through the issuance of approximately $5 million of TranSwitch Common Stock. According to a press release, upon the satisfactory achievement of certain revenue objectives and a positive operating cash flow over the next 12 months, TranSwitch will pay up to an additional $10 million in the form of TranSwitch stock or cash, at its option. The transaction is expected to be completed in TranSwitch's first quarter ending March 31, 2006, subject to customary closing conditions and requisite regulatory approvals. Mysticom Ltd. will operate as a wholly owned subsidiary of TranSwitch.
"TranSwitch continues to be committed to achieving operating break-even in the second half of 2006, and it is our objective that this acquisition will be cash-flow and P&L neutral in this timeframe," concludes Das.
SVB Alliant, the investment banking subsidiary of SVB Financial Group, exclusively represented Mysticom Ltd. in the transaction.