NeoPhotonics is offering about US$39.2 million plus possibly another $7.5 million contingent on Santur's performance. Santur's revenues were $21 million for the six months ending June 30, according to NeoPhotonics.
The deal is expected to close by year's end.
Why this matters
Suppliers are gearing up for the 100Gbit/s product cycle, and NeoPhotonics is no exception. The deal would give NeoPhotonics, which stakes its name on photonic integration, some 100Gbit/s-related indium phosphide (InP) piece-parts to integrate.
It also gives NeoPhotonics an easy way into the 10x10 multisource agreement (MSA). Santur was an early champion of the transceiver format, which is an alternative to telecom's 100Gbit/s standards and has the backing of some big customers including Brocade Communications Systems Inc. (Nasdaq: BRCD) and Google (Nasdaq: GOOG).
Santur also has coherent 100Gbit/s optics, according to the NeoPhotonics press release.
Separately: So much for that IPO -- Santur's, that is. The company strove to go public years ago but couldn't get it done. While $46.7 million is nothing to sneeze at, Santur raised at least $108 million in its 12-year lifetime, by Light Reading's count.
For more
Here's a bit more on 100Gbit/s and Santur's road to an exit.
- Santur Ships 10x10 CFPs
- Level 3's Paul Savill: Not Hot on the Cost of 100G (video)
- NeoPhotonics Sets IPO Terms
- Optical Exits
- Santur Reaches for 100-Gig
— Craig Matsumoto, West Coast Editor, Light Reading
Craig,
while I understand the motivation for Neophotonics to buy Santur, I question the statement about Santur having coherent technology.
Can you did into this and get back to us readers?
I think Neo buying Santur is good for NeoPhotonics on many levels. 10x10, tunable laser, 10Gig MZI, etc.
Just have not seen any press about coherent technology from Santur. To my knowledge they don't have such, but they could have some development that has not been announced. However, it would have to be either detectors that are useful for NeoPhotonics front end for coherent detection, or it would have to be high speed MZI's for the modulation. To my knowledge, Santur's MZI is great for 10G, but has limited bandwidth and struggles for the speeds needed for 100Gig (100Gig PM-DQPSK needs about 4 x 30Gig to make it work).
so, some additional digging and reporting on this would be most helpful.
Note: I would be happy if Santur really has such as I am a Neophotonics stock holder and I think it would be good for my stock value. But I kind of doubt it unless it is the detectors. As you know, this is an area where I have some expertise.
Also, I sure hope Neo can make a good go of the Santur tunable. As you know, Neo has purchased at least 2 tunable laser suppliers in the past and nothing came of it. Bandwidth 9 and Paxera.
Finally, it would be really interesting to know the mix of revenue from santur's products: how much from tunable vs how much from 10x10. I think the 10x10 revenue is larger of the two these days. But that is just a guess based on general market knowledge. I have zero insider information.
sailboat