A couple of Israeli optical subsystem startups -- Civcom Inc. and Xlight Photonics -- are planning to announce a merger today (Sunday).

Under the deal, Xlight's staff will move to Civcom's office and Civcom's CEO, David Mendlovic, will become the CEO of the merged company. In other words, it's more of a takeover than a merger. The companies' combined staff of about 40 will undergo a little trimming, according to Jacob Vertman, Civcom's senior VP of marketing and business development.

Some but not all of the investors in the two startups have agreed to stump up more cash for the merged company. "This is going to make us even more financially stable," says Vertman, who declines to offer specifics.

Civcom makes all-optical switching subsystems. Its investors include Mercator Broadband Partners, Omninet Capital, Formula Ventures, Concord Ventures, and Aurum-SBC Ventures, which is itself funded by SBC Communications Inc. (NYSE: SBC). At the time of its second round of funding, in April 2001, the company was valued at $45 million (see Civcom Inc.).

Xlight makes widely tunable transponders. Its investors include Ascend Technology Ventures, Jerusalem Venture Partners, and Pitango Venture Capital (see Optical Packet Switching Lives On).

The merged company will sell Civcom and Xlight products via Civcom's existing marketing operations in the U.S. Jointly developed products are planned, but details are not being given at this stage. The merged company is to be given a new name, which has yet to be chosen.— Peter Heywood, Founding Editor, Light Reading