Light Reading

Alcatel-Lucent Buys Optical Specialist

Ray Le Maistre
1/10/2013
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Alcatel-Lucent has acquired Wavelength Selective Switch (WSS) specialist Capella Photonics Inc. for an undisclosed sum.

AlcaLu tells Light Reading the acquisition was made "late last year … to add to our overall optical capabilities." San Jose, Ca.-based Capella makes WSS products for use in ROADMs (reconfigurable optical add/drop multiplexers) and optical cross connects. (See Capella Adds 1x20 WSS.)

The vendor giant isn't revealing any more than that, though, saying only that it was "a relatively small acquisition" and that news of the deal wasn't broadcast as the purchase price fell below (an unspecified) "threshold for public disclosure."

The deal would have been struck just as AlcaLu was coming to terms with significant job cuts and arranging a financial lifeline. (See Alcatel-Lucent Secures €1.6B Lifeline and AlcaLu Job Cuts to Hit 5,500.)

Capella, which was founded in 2000, raised more than $90 million in equity and debt financing between 2001 and 2011. Its most recent investment was a $20 million round from a group of investors including Black Diamond Ventures and SingTel Innov8, the corporate venture arm of Singapore Telecommunications Ltd. (SingTel). (See Capella Raises $20M.)

The acquisition leaves CoAdna Photonics Inc. as the last independent WSS specialist of any note. (See Edge ROADM Specialist Gets Bought.)

— Ray Le Maistre, International Managing Editor, Light Reading

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Balet
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Balet,
User Rank: Light Beer
1/11/2013 | 10:16:53 PM
re: Alcatel-Lucent Buys Optical Specialist
IMHO, Capella have been too much driven by VCs and not-átechnologists-áor marketeers. I know a few people who had tried it there. While technology is cool, S&M and procurement organizations seem to be weak. Hires/Fires were sometimes based on VCs "old fashion" views - big names, from big companies "increasing the sale value of the company" and not by what people could really do. Larry is a very smart businessman/technologist, but he was not always the last saying in the company.
Very common mistake in start-up lives.
Another WSS-ávendor, Nistica is a good example of "scientist-driven" business.
Finisar/Optium have done quite well having picked up smart Australians. JDSU is legacy, very rigid corporate limited organization not open to change. Oclaro has been trying hard to integrate Xtelus. CoAdna have done well focusing on low cost Chinese-ásuppliers, but sometimes lack-áinnovation, IMHO.
The biggest problem right now is the market itself, so shrunk and competitive that WSS vendors are forced to sacrifice product performance, margins and limit innovations to survive price pressure from "Huaweis" of this world.
I wonder how this-áacquisition-áwill affect "big boys" business at AlcaLu.
bandaoti
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bandaoti,
User Rank: Light Beer
1/11/2013 | 1:11:50 AM
re: Alcatel-Lucent Buys Optical Specialist
Below is market share, JDSU(38%)pÇüFinisar(34%)pÇüCoAdna(18%). And NisticapÇüOclaropÇüOplink and so on. I don't want to comment Capella market share, i just want to say, lower market share tell its price and performance. I doubt this buying.
bandaoti
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bandaoti,
User Rank: Light Beer
1/11/2013 | 12:48:32 AM
re: Alcatel-Lucent Buys Optical Specialist
Why ALU buy this company since ALU itself is struggling to survival? Is this buying take any benifit to ALU?
redface
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redface,
User Rank: Light Beer
1/10/2013 | 8:26:31 PM
re: Alcatel-Lucent Buys Optical Specialist
Capella is known for two things: 1) number of granted patents on WSS. 2) number of financing rounds. -áJust does not have the customer wins to show for it. -áNow it finally ends its struggle and gets bought for peanuts, probably for its patents. -á

Anyone knows why Capella could not make it? -á
Craig Matsumoto
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Craig Matsumoto,
User Rank: Light Sabre
1/10/2013 | 6:53:16 PM
re: Alcatel-Lucent Buys Optical Specialist
Thanks to Seeking Alpha for the link: http://seekingalpha.com/curren...
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