Ciena Corp. has inked a deal to acquire Internet Photonics Inc. (IPI) in a deal valued at roughly $150 million, giving Ciena its first direct foray into the cable sector.
New Jersey-based Internet Photonics is a leading supplier of optical Ethernet transport and switching gear to a number of telcos and cable operators, including Cox Communications, Cablevision Systems Corp., Adelphia Communications and Buckeye CableSystem.
"Cable has not been a strong presence for us," admitted Tom Mock, Ciena's senior vice president of strategic planning. But in addition to giving Ciena a strong cable transport play, the acquisition will also help the company round out its portfolio for the telco arena, he pointed out.
Although Internet Photonics had managed to get some big cable wins, getting the company to that next level of deployment compelled it to seek a merger with a larger entity.
"We looked at the financial support and presence Ciena has, and [acknowledged] that we can get more complete coverage," said Internet Photonics Vice President of Marketing Gary Southwell.
Plus, a connection with Ciena will eliminate possible fears MSOs might have in striking big deals with a start up. "Having Ciena's backing takes that factor off the table," Southwell added.
The deal, expected to close this summer, will give Ciena access to Internet Photonics' product portfolio, which includes the LightStack MXA, a low-cost access device, the LightStack GSLAM, and the LightHandler, a 40 wavelength passive optical add/drop and bi-directional amplifier that interfaces with Sonet/SDH and DWDM networks.
Ciena said Internet Photonics will become part of its Metro and Enterprise Solutions group, but did not say how many of Internet Photonics' 110 employees will join the combined company.