MaxLinear to Acquire Physpeed

08 October 2014

MaxLinear will acquire Physpeed Co., a developer of high-speed physical layer interconnect products for enterprise and telecommunications infrastructure applications.

Physpeed’s products include a range of advanced technology solutions such as optical physical medium devices (PMDs) and clock data recovery (CDR) devices at line-rate speeds ranging from 10Gbps to 100Gbps today and 400Gbps in the future.

MaxLinear said its acquisition of Physpeed will accelerate MaxLinear’s total addressable market expansion efforts into infrastructure for data center and metro and long-haul telecommunications operators. MaxLinear, based in Carlsbad, Calif., develops radio-frequency and mixed-signal semiconductor solutions for broadband communications applications.

The total available market for 40G and 100G optical integrated circuits is estimated to be approximately $500 million in 2014, with a growth opportunity resulting in amarket size in excess of $1.5 billion over the next four years, according to MaxLinear.

Dr. Kishore Seendripu, CEO of MaxLinear, said the acquisition will help his company bring to market solutions that enable the explosive data traffic growth generated from smart phones and tablets, and over-the-top (OTT) streaming video, in addition to cloud computing and data analytics in hyper-scale data centers.

At closing of the acquisition, MaxLinear expects to payapproximately $11 million in cash in exchange for all outstanding shares ofcapital stock and equity of Physpeed. In addition, the definitive mergeragreement provides for potential earn out consideration of up to $750,000 forthe achievement of certain 2015 and 2016 revenue milestones.

The boards of directors of each of the companies have approved the merger. The closing is expected to occur in the fourth quarter. The deal is subject to customary closing conditions, including the approval of Physpeed’s shareholders.

Physpeed is based in Camarillo, Calif.

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