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MaxLinear to Acquire Physpeed for $11M

October 06, 2014

MaxLinear has announced that it will acquire Physpeed, a maker of physical layer networking interconnect products for $11 million.

“Physpeed’s expertise in high-speed analog design, combined with MaxLinear’s proven low-power digital CMOS mixed signal-integration and DSP capabilities, will bring to market solutions that will uniquely enable the explosive data traffic growth generated from smartphones and tablets, and over-the-top (OTT) streaming video, in addition to cloud computing and data analytics in hyper-scale data centers,” MaxLinear CEO Kishore Seendripu said.

MaxLinear decided to acquire PhySpeed for its product range, which includes optical physical medium devices (PMDs) and clock data recovery (CDR) devices. Clock data recovery recreates the clock signal that is often not sent in high-speed networking streams that are needed for accurate timing.

PhySpeed makes devices at speeds ranging from 10 gigabits per second all the way to 100 gigabits per second, with plans to offer 400 gigabits per second in the future. MaxLinear Estimates the total market value for 400G and 100G to be $500 million in 2014, with the possibility to grow to over $1.5 billion over the next four years.

Seendripu in particular cited its engineering capabilities in pursuing Full Spectrum Capture (FSC) in the cable and satellite broadband communications markets.

The move towards over-the-top video providers like Netflix, assuming that cable companies don’t hamper them now that the FCC’s net neutrality provisions have been obliterated, will prompt carriers to upgrade their infrastructure to 100G and 400G. MaxLinear could really profit from such a move.

MaxLinear will pay approximately $11 million in cash for the privately held company, including all of its outstanding shares and equity. A portion of that money will be paid into an escrow account for shareholders. The merger agreement also has potential earnout consideration of up to $750,000 if the company meets 2015 and 2016 revenue goals.

Edited by Maurice Nagle

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