| June 16, 2008 | Venturewire |
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| Cortina Systems to Acquire Storm Semiconductor |
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| Portfolio Company: Cortina Systems |
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By Scott Denne
Heavily venture-backed Cortina Systems Inc., a maker of networking chips, has announced an agreement to acquire Storm Semiconductor Inc. to extend its product line into home networking products.
The price of the deal was not disclosed.
Mountain View, Calif.-based Storm Semiconductor, which makes chips for distributing digital multimedia content, had raised a small amount of venture capital from TSC Venture Management, Birch Venture Capital and Faraday Technology Corp., all of which are based in Taiwan, according to Storm's chief executive, Stewart Wu.
This is the third acquisition Cortina has made to broaden its product portfolio. Last year the company acquired ImmenStar Inc., and almost two years ago it paid $115 million for Intel Corp.'s optical networking unit.
"The ImmenStar acquisition got us into the access market, but when we looked further inside the house we saw the networks were very rudimentary and even if you bring more bandwidth you still get bottlenecks," said Cortina CEO Amir Nayyerhabibi, who said content flowing in both directions with more people increasingly publishing content online was the reason for the bottlenecks.
Cortina has raised more than $250 million in four rounds of venture capital. The latest round was a $132 million Series D that was used to buy the Intel unit. Investors include Alloy Ventures, Bridgescale Partners, Canaan Partners, DCM, El Dorado Ventures, Hotung Capital, Institutional Venture Partners, Invesco, Jafco Ventures, Kodiak Venture Partners, Morgenthaler Ventures, Redpoint Ventures, Sofinnova Ventures and Vedanta Capital.
Cortina, which makes chips for the core, metro, access and enterprise network market segments, has been profitable for the last 18 months, Nayyerhabibi said.
The combined company will have between 350 and 400 employees, with 55 of those coming from Storm. The deal is expected to close by the end of the month, Nayyerhabibi said. |
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