Ciena Corp. and privately held TeraXion have reached an agreement for Ciena to acquire the Quebec City company’s High-Speed Photonics Components (HSPC) assets. Ciena will pay roughly CAN$46.6 million (US$32 million) for the assets, including their indium phosphide and silicon photonics technologies with the associated intellectual property (IP).
“The TeraXion HSPC assets advance Ciena’s established leadership in high-speed optics and enhance our ability to develop differentiated solutions that enable service providers to scale their networks with greater programmability and agility,” said Scott McFeely, Senior Vice President, Networking Platforms at Ciena. “This acquisition also reinforces our commitment to serving as a growth and innovation engine in Canada, which is home to our largest employee base and more than 50 percent of our global research and development team.”
No specifics were provided about how Ciena intends to incorporate these technologies into their existing products.
Before the 2001 tech bubble bust, optical equipment powerhouses including Lucent Technologies, Nortel and Alcatel were going crazy spending hundreds of millions of dollars to purchase assets for vertical integration. The intent was to provide them a real competitive advantage. In reality, the debt sunk the companies.
So how should we view this added level of vertical integration by Ciena? Only time will tell as to how much value these new assets will provide to Ciena. But a $32 million investment is a small acquisition for a Ciena with sales of 2.29 billion and a market cap of $2.44 billion. If Ciena successfully incorporates the new technologies, they could like geniuses.
For more details on the acquisition, see Ciena release