22 Sep 2006
Following Intel's announcement of its restructuring, which will see 10,500 jobs cut, the semiconductor giant is selling its optical components business to fellow Californian company Cortina Systems.
Intel has sold its optical network components business to Cortina Systems for approximately $115 million. The transaction was completed last week after completing regulatory review.
The sale was announced just a week after Intel announced a major restructuring that will result in a loss of about 10% 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 division.
Cortina, based in Sunnyvale, California, is a supplier of advanced communications semiconductor solutions for the carrier infrastructure market. "This acquisition broadens our offering to give us a comprehensive portfolio of products for network infrastructure applications," said Cortina CEO Amir Nayyerhabibi of the acquisition.
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 will be working together during the coming months to complete a smooth transition of the business, and Cortina 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, along with other new investors Alloy Ventures, Bridgescale Partners, Doll Capital Management and Sofinnova Ventures. Existing Cortina investors also participated.