NeoPhotonics Corp., a maker of photonic integrated circuit (PIC) based modules and subsystems for high-speed communications networks, will acquire Santur Corp., a privately held designer and manufacturer of indium phosphide (InP) based PIC products, in a deal worth nearly $47 million, the two companies announced today. Fremont, Calif.-based Santur makes high-performance tunable laser arrays for metro and long-haul DWDM systems and develops PIC-based products for 40-Gb/s and 100-Gb/s client-side and coherent-line-side applications. The company, founded in 2000, generated revenue of about $21 million for the first six months of the fiscal year. Founded in 1996, NeoPhotonics has approximately 3000 employees and is based in San Jose. The company also has engineering and manufacturing facilities in Silicon Valley and Shenzhen, China. Under the deal, NeoPhotonics will pay an estimated $39.2 million in cash for Santur, after deductions for closing costs and other adjustments, plus up to $7.5 million additional cash contingent on Santur products reaching certain financial goals by the end of 2012. "By combining active InP PICs from Santur with our hybrid PICs, we can provide our customers with new products for 100 G coherent systems that feature higher levels of integration, higher performance and greater functionality," said NeoPhotonics Chairman and CEO Tim Jenks. He added that Santur's tunable laser products also fit with NeoPhotonics' Speed and Agility product lines, enabling the company to provide more complete solutions for reconfigurable networks. The deal also complements NeoPhotonics' recent move into the growing market segment of PIC-based 40- and 100-Gb/s transceiver modules for client-side and data center applications, Jenks said. "We intend to further develop our 100 G coherent-line-side products and rapidly establish NeoPhotonics as a major vendor of client-side components for the cloud," Jenks said. "This is a case of the sum being much greater than the parts, and we believe that NeoPhotonics represents an excellent strategic fit for Santur," said Paul Meissner, Santur president and CEO. Santur's board of directors and stockholders have approved the transaction, which is expected to close in the fourth calendar quarter of 2011. For more information, visit: www.neophotonics.com