Oplink Communications Inc. (Nasdaq: OPLK) this morning announced a deal to acquire startup RedClover Networks Inc. for the bargain-basement price of $250,000 in cash.

Oplink would also pick up liabilities and "other costs" totaling $1.3 million, so this could be considered a million-dollar deal. The transaction is expected to close in November.

All 25 of RedClover's employees have been offered jobs at Oplink. RedClover's manufacturing will be moved to China, where Oplink has started up a contract manufacturing business (see Oplink Becomes Contract Manufacturer).

Officials from neither company could be reached for comment this morning.

RedClover develops 10-Gbit/s transponders, but its real talent is in finding ways to clean up the optical signal in order to extend the transponder's reach. Dozens of component companies are doing similar things, many of them tackling specific problems such as Chromatic Dispersion and Polarization Mode Dispersion (PMD). RedClover claims its technology can fix any impairment on the line, without doing any kind of shaping or encoding.

"We sit and wait at the [receiving] end and tidy everything up," said John Ralston, RedClover's VP of marketing, in a briefing with Light Reading last July.

The idea is to remove the need for external components such as dispersion compensators, replacing them with one chip-sized gizmo integrated inside RedClover's transponder. "You get rid of a lot of stuff that's in the line system and put it into your terminal equalizer," Ralston said.

RedClover's technology hasn't been disclosed, but it uses a combination of optics and electronics to do some form of equalization. No kind of encoding/decoding scheme is involved, so the technology could theoretically get added to an arbitrary transponder to extend its reach. Earlier this year, RedClover claimed to be demonstrating a reach of 240 kilometers for 10-Gbit/s signals (see RedClover Unveils Transponders and RedClover Sets 10-Gig Benchmark).

RedClover was incorporated in 2000. The company received $12 million in March 2001 from investors including TeleSoft Partners, Diamondhead Ventures, and Fujitsu Quantum Devices Ltd.

— Craig Matsumoto, Senior Editor, Light Reading