Cisco to Acquire CoreOptics for $99M Cash

Cisco is to buy privately held CoreOptics, a designer of digital signal processing solutions for high-speed optical networking applications.

Under the terms of the agreement, Cisco will pay approximately $99 million in cash and retention-based incentives in exchange for all shares of CoreOptics.

The acquisition is subject to customary closing conditions and is expected to close in the second half of calendar year 2010.

CoreOptics’ product portfolio includes advanced 10Gbps and 40Gbps transponders for metropolitan, regional and long haul optical systems using different protocols.

Based in San Jose, with the majority of its employee base in Germany, CoreOptics will enable Cisco to equip service provider customers with 100 Gigabits per second (Gbps) transmission technology to scale their networks to “meet the demands of rapidly growing Internet Protocol traffic driven by video, mobility and cloud services”.

The acquisition of CoreOptics expands Cisco’s optical presence in Europe, building on its existing European operations in Monza, Italy. Upon completion of the acquisition, all 116 CoreOptics employees will become part of the Cisco Service Provider Technology Group.

CoreOptics, founded in January 2001, was backed with roughly $90 million in venture capital from multiple investors and strategic partners, including Crescendo Ventures, TVM Capital, GIMV, High Tech Private Equity, Atila Ventures, QUEST FOR GROWTH and T-Com Venture Fund.

By Robin Wauters

CoreOptics is the leading providers of 10G and 40G Distortion Tolerant Transponder Modules and IC solutions for Metro, Regional and Long Haul optical and data networking markets.

With a belief that optical communications networks must become open systems that economically transmit information regardless of data rate or fiber types, CoreOptics provides the only field-proven MLSE-based equalization solutions on the market today. This innovative technology helps Tier 1 systems vendors and carriers deploy the next generation of high-performance networks using their existing fiber infrastructure.

CoreOptics’ 10G and 40G Distortion Tolerant Transponder Modules eliminate the need for Optical Compensators and the respective Second Stage Amplifiers, allowing customers to reduce their first-in deployment cost by up to 30%.