Avago strengthens 100G portfolio with CyOptics acquisition

Avago Technologies Ltd. (NASDAQ: AVGO) has signed a definitive agreement to acquire optical component supplier CyOptics, Inc. for an aggregate acquisition price of approximately $400 million in cash.

Avago Technologies Ltd. (NASDAQ: AVGO) has signed a definitive agreement to acquire optical component supplier CyOptics, Inc. for an aggregate acquisition price of approximately $400 million in cash.

CyOptics specializes in indium phosphide (InP) optical chip and component technologies for the data communications and telecommunications markets (see, for example, "CyOptics intros 40-Gbps TOSA, ROSA for QSFP+ transceivers"). Avago believes the acquisition will strengthen its portfolio for emerging 40G and 100G enterprise and data center applications. CyOptics' singlemode laser, receiver, and photonics integration capability will enhance Avago's technology position in these applications, the company asserts. Avago's optical transceiver products primarily leverage VCSEL-based technology today.

In addition, Avago says the acquisition of CyOptics will help it to establish a complementary optical components business, not only to serve growing segments of the access, metro, and long-haul telecommunications markets, but also for enterprise and data center segments.

"We believe CyOptics' leading InP technology and optical manufacturing capability will strengthen Avago's fiber-optics portfolio and accelerate our ability to capture next generation 40G and 100G enterprise and data center sockets," said Hock Tan, president and CEO of Avago. "With CyOptics, we also see interesting revenue growth opportunities in delivering a broad range of proprietary components to the market."

CyOptics revenue has more than tripled over the past three years. During calendar year 2012, CyOptics net sales were approximately $210 million, up 21% from 2011.

"We are delighted to join Avago Technologies, a company with a long history of innovation and a strong position in the wired infrastructure market. We believe this transaction presents tremendous opportunities for our customers and our employees," said Ed Coringrato, president and CEO of CyOptics.

CyOptics’ investors include JVP Funds and TA Associates.

Avago intends to fund the transaction with cash on-hand. The transaction is subject to customary closing conditions, including the receipt of regulatory approvals in the United States, and is expected to close during Avago's third fiscal quarter of 2013.

For more information on optical components and suppliers, visit the Lightwave Buyers Guide.

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