This acquisition is surprising. Cortina previously focused more on the core of the network and has either built or acquired products designed to enable the next generation of WAN equipment for carrier applications. Immenstar is tightly focused on fiber to the home chipsets, a much more access oriented application. I suspect that Cortina is looking to couple its carrier class ethernet solutions with Immenstar’s high density OLT solution. Still, it is not a pretty fit.
Immenstar is a hybrid Chinese-American company with strong ties to UT Starcom, a company that at one point was poised to supply Nippon Telegraph & Telephone Corp. (NYSE:NTT) with large amounts of FTTH equipment. They stumbled (or were tripped by Passave) and Mitsubishi Electric took the majority of the lucrative and prestigious NTT contracts. As a result, Immenstar has not been tremendously successful in the marketplace. I suspect that this acquisition was Immenstar’s only option.
Cortina is one of the more interesting startups out there today, and appear to be pursuing a strategy of strategically integrating underperforming assets acquired from both public and private companies with a goal of consolidation. This is a core Nyquist strategy.
It’s unfortunate that companies like Centillium (CTLM) are not actively engaged in attempting to sell their own FTTH assets. As an owner of Centilluim equity, I find this extremely frustrating. It’s clear that Cortina would have been an interested suitor.
Hat Tip: Venturebeat.
Disclosure: Author is long Centillium.