Networking equipment provider Cisco has entered discussions to acquire US-based fabless semiconductor technology producer Luxtera in a deal that would enable electronics manufacturer Tokyo Electron to exit, Bloomberg reported on Tuesday.
Cisco is set to pay “hundreds of millions of dollars” for the company, people familiar with the plans told Bloomberg, adding that it outbid other potential buyers including Intel and Broadcom.
Founded in 2001, Luxtera produces silicon photonics-based optical transceivers for use in data centres, transmitting data through optical fibres instead of electrical wire.
The company manufactures the equipment in large volumes than most rivals meaning it can be supplied more cost-effectively, and the acquisition would strengthen Cisco’s access to components that could improve its networking systems.
The proposed acquisition would follow approximately $223m in funding, according to press releases and regulatory filings, Luxtera most recently raising $37.4m in 2014.
Tokyo Electron joined New Enterprise Associates, Lux Capital, August Capital and Sevin Rosen Funds for the company’s $21.7m series C round in 2012, and it is listed as a portfolio company of the corporate’s TEL Venture Capital subsidiary.
Earlier investors in Luxtera include private research university California Institute of Technology and Advanced Equities, an investment firm that closed its doors in 2012.
Photo courtesy of Luxtera.
