On the heels of Agility Communications Inc.'s pending acquisition, tunable laser maker Iolon Inc. might be plotting a deal of its own.

Some sort of event is imminent, sources say. Summer rumors swirled around Iolon possibly going out of business, with at least one laser vendor reporting increased business from former Iolon customers.

"We've heard that Iolon's doing some kind of transaction, either exiting the business or something in the strategic sense," says one Iolon competitor, requesting anonymity.

More recent information suggests Iolon might be negotiating a sale. Agility, Iolon's twin from the early bubble days, announced this week an acquisition by components giant JDS Uniphase Corp. (Nasdaq: JDSU; Toronto: JDU). (See JDSU Tunes In Agility.) Could it be Iolon's turn?

Iolon officials are mum. "I really can't make any comment at this time," says Tim Harris, the company's chief operating officer.

Candidates for buying Iolon are in short supply, however. JDSU rivals Avanex Corp. (Nasdaq: AVNX) and Bookham Inc. (Nasdaq: BKHM; London: BHM) seem unlikely, as they need to conserve cash while restructuring. has money but also has its own tunable laser.

On a smaller scale, there's CyOptics Inc., which made the surprise purchase of TriQuint Semiconductor Inc.'s (Nasdaq: TQNT) optical division -- the former Agere Systems Inc. (NYSE: AGR.A) division -- in May.

Or, Iolon might be talking to a fellow startup; some similar deals came around earlier this year, with the merging companies getting some extra venture money on the side (see ASIP, T-Networks Reach Apogee and Continuum, Polatis Join Forces).

— Craig Matsumoto, Senior Editor, Light Reading