LONDON Optical subsystems specialist Optium Corporation is to acquire Israeli developer of 40Gbit/s transmission devices Kailight Photonics in a deal valued at up to $40 million.
The deal includes a $35 million up-front payment in cash and a stock earnout of up to $5 million depending on certain business and technology milestones being met through Optium's second fiscal quarter of 2009.
Venture capital investors in Kailight (Nes Ziona, Israel) include Lucent Venture Partners, Hyperion Venture Partners, Ofer Brothers High-Tech Group and Yozma Venture Capital. The company was founded in 2001 and is believed to have raised about $12 million in venture founding.
The acquired business is expected to contribute to earnings early in calendar year 2008 according to Optium, and to close within the next 45 days, subject to customary closing conditions and regulatory approvals.
Kailight's optical modules, including 300 pin 40Gbit/s transceivers, are said to offer polarization mode dispersion compensation and multiple modulation formats, not currently available many transceivers of this capacity.
The company says the parts have been qualified with several system integrators and have started shipping in pre-production quantities. Kailight has 20 full time employees, working mainly on product development.
For Optium (Horsham, Pa) the deal builds on its range of optical subsystems, which includes fully wavelength agile DWDM, SONET and 10GE transceivers, 10Gbit/s pluggable transceivers and CATV subsystems, as well as its future reconfigurable optical add/drop multiplexer, or ROADM range, that enables dynamic wavelength processing.