Trying to bolster its optical components portfolio, Avanex Corp. has agreed to buy the assets of Vitesse Semiconductor's Optical Systems Division, located in San Jose, for 1.2 million shares of common stock.
Avanex, a Fremont, Calif., supplier of photonic processing subsystems and modules, will also buy up to $2 million in products from Vitesse over next three years.
The deal is the third for Avanex in recent months, signaling continuing consolidation in the optical components industry. In July, Avanex completed stock swap acquisitions of the optical components division of Alcatel Optronics and the assets of Corning Inc.'s photonics business.
Some industry observers contend the Alcatel and Corning deals were sweetened for Avanex to take over unprofitable businesses in a declining market. Several analysts, though, noted the acquisitions propel Avanex into the top tier of optical component suppliers behind JDS Uniphase Corp. and Bookham Technology plc.