Inphi to acquire Cortina Systems' optical transport semiconductor business
Inphi Corp. (NYSE: IPHI), a provider of high-speed, mixed signal semiconductors, and Cortina Systems, Inc., a communications semiconductor vendor, say they have entered into a definitive agreement under which Inphi will acquire Cortina's high-speed interconnect and optical transport product lines for $52.5 million in cash and $73.5 million in stock.
The acquisition does not include Cortina's access and digital home business, which is currently scheduled to be divested prior to the acquisition close and will continue as an independent company.
Inphi says the acquisition will solidify the company’s position as a supplier of optical and networking interconnect silicon while expanding its product portfolio for the fast growing enterprise and cloud data center markets.
Cortina is provider of communications ICs for optical transport and networking interconnects with a product portfolio that spans 1G to 100G Ethernet and Optical Transport Network (OTN; see, for example, "Cortina Systems, Acacia Communications pair for 100-Gbps coherent optical equipment designs"). Cortina points out that these products have been validated through multiple design wins at tier-one networking OEMs over the years.
Inphi's networking interconnect products – the company is best known for its 100G SerDes and CDR chips – will be complemented with 10G/15G/40G PHY interconnects, thus completing the product portfolio and creating a one-stop shop for high-speed networking interconnects.
Inphi's optical interconnect products, which include 100G amplifiers and drivers for the transport segment, will be strengthened by Cortina's 10G/40G/100G framer mapper products, creating an industry leader for the optical transport interconnects.
Cortina's experienced R&D engineering team will continue to develop products for the network infrastructure market with a focus on the datacenter and enterprise segment. Inphi believes that the combined product development teams of the two companies will result in a premier R&D organization that will be “a world leader in high-speed analog circuits, signal integrity, digital signal processing, complex digital architectures and algorithms, low power mixed signal expertise, high-speed packaging and quality manufacturing at advanced process nodes,” according to the press statement.
"We are truly excited about the interconnect market leader this merger creates for service provider and data center customers," said Ford Tamer, president and CEO, Inphi. "We are excited to add Cortina's industry-leading products to our portfolio and talented employees to our team. We believe the combined entity will bring financial efficiencies in revenue, gross margin and operating income, that we expect will deliver significant value for our shareholders."
The transaction is expected to close in late September or October subject to approval by the shareholders of Cortina, the receipt of regulatory approvals and other customer closing conditions.