Cortina Systems Acquires Intel's Optical Network Components Business, Raises $132 Million in Funding Round

Strategic Insights -

Cortina Systems, a leader in advanced communications semiconductors, has made a significant move in the industry with the acquisition of Intel's optical network components business for $115 million and the completion of a new funding round of $132 million. The acquisition marks a major step forward in Cortina's strategy to become the new leader in components for the infrastructure routing, transport, and enterprise markets. The funding round, led by Institutional Venture Partners (IVP), will create the next major semiconductor supplier in the networking space.

Key Takeaways:

  • Cortina Systems acquired the assets of Intel's optical network components business for $115 million, consisting of a minority investment position and an undisclosed amount of cash.
  • The acquisition brings together a broad range of solutions for IP, optical, TDM, and enterprise applications, expanding Cortina's product line and footprint in the communications semiconductor market.
  • Cortina has completed a new funding round of $132 million, led by IVP, with additional investments from Alloy Ventures, Bridgescale Partners, Doll Capital Management, and Sofinnova Ventures, among others.
  • The transaction closed on September 8, 2006, and Cortina will add key Intel employees in engineering, product testing/validation, operations, marketing, and application engineering as well as new facilities in Folsom, California, Raleigh, North Carolina, and Asia.
  • The acquisition is a significant step forward in Cortina's strategy of expanding its technology and market capabilities by adding highly complementary technologies that have an existing customer base.
  • Cortina has been a leader in components for the IP routing and transport markets, while Intel has primarily focused on TDM and optical components.
  • The company has a reputation for superior quality and customer support, and the acquisition will expand its infrastructure to strengthen its position.

Statistics:

  • Cortina Systems acquired the assets of Intel's optical network components business for $115 million.
  • The funding round raised $132 million, led by Institutional Venture Partners (IVP).
  • The transaction closed on September 8, 2006.
  • Cortina Systems has added key Intel employees in engineering, product testing/validation, operations, marketing, and application engineering as well as new facilities in Folsom, California, Raleigh, North Carolina, and Asia.
  • Cortina Systems has been a leader in components for the IP routing and transport markets for over a decade.
  • The company has a strong track record of innovation, with a number of industry-first products and technologies.

Sources:

  • Cortina Systems press release announcing the acquisition and funding round.
  • Interview with Norm Fogelsong, general partner at IVP.
  • Interview with Drew Lanza, general partner at Morgenthaler Ventures.
  • Interview with Eric Young, co-founder and general partner at Canaan Partners.
  • Interview with Amir Nayyerhabibi, CEO of Cortina Systems.
  • Cortina Systems website: www.cortina-systems.com.