Intel Sells Optical Components Biz for $115M
SANTA CLARA, Calif., Sept. 12, 2006 -- Intel Corp. announced yesterday it has sold its optical network components business to Cortina Systems Inc. for approximately $115 million. The transaction closed on Friday after completing regulatory review.
The sale comes a week after Intel announced a major restructuring that will result in a loss of about 10 percent of its work force, or 10,500 jobs, through layoffs, attrition and selling underperforming business units. The sale to Cortina gives Intel a minority stake in that business and included an undisclosed amount of cash.
Intel said the sale will help the company focus on its core communications and embedded businesses, including network processors, modular communications platforms and optical modules. "The optical-networking components segment remains a strong market opportunity, and we believe this business and its assets are an optimal fit for Cortina," said Bill Chatwell, general manager of Intel's Optical-Networking Components Div.
Cortina, based in Sunnyvale, Calif., is a supplier of advanced communications semiconductor solutions for the carrier infrastructure market. "This acquisition positions Cortina to become the leading pure-play communications semiconductor company," said Cortina CEO Amir Nayyerhabibi of the acquisition. "It greatly broadens our offering to give Cortina a comprehensive portfolio of products for network infrastructure applications."
Intel's optical networking components business includes approximately 120 employees involved in engineering, operations and marketing. Cortina said it has extended employment offers to a "significant number" of these employees. The two companies said they will be working together during the coming months to complete a smooth transition of the business, and Cortina said it plans to continue to work with Intel as a member of the Intel Communications Alliance.
Cortina also announced that, concurrent with the acquisition, it has closed a $132 million venture capital funding round led by new investor Institutional Venture Partners (IVP), along with other new investors Alloy Ventures, Bridgescale Partners, Doll Capital Management and Sofinnova Ventures. Existing Cortina investors also participated.
For more information, visit: www.intel.com or www.cortina-systems.com
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