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Canadian analogue chip maker Gennum has bought Nanotech Semiconductor of Bristol for $34m, with staff sharing a $6m earnout over the next year.

“Through this acquisition, Gennum has significantly strengthened our mixed-signal and optical product portfolio and added critical CMOS technology capability enabling our company to address a broader range of high growth networking markets such as Fibre to the Home, Ethernet and consumer optics,” said Dr. Franz Fink, President and Chief Executive Officer of Gennum. “We have listened to our customers’ needs to simplify the supply chain and can now provide them with one of the most complete optical transceiver ICs portfolios spanning all data rates. Indeed, we believe the Nanotech portfolio coupled with Gennum’s high speed mixed signal and optical portfolio will increase our ability to provide more, high value products resulting in increased growth opportunities for Gennum.”

Nanotech had revenue of $7.4m last year, with a run rate of $12m for this year. If Nanotech maintains this run rate this year, there is an additional $6m in the deal for staff. The company was founded by serial entrepreneur Gary Steele and backed by Pond Ventures and Atlantic Bridge Ventures.

Gennum’s optical IC portfolio runs from 10Gbit/s-100Gbit/s and the acquisition of Nanotech enables it to offer 100Mb/s to 100Gb/s optical IC solutions to fast growing markets such as Fibre to the home (PON) and Ethernet. The transaction is expected to result in a number of benefits, including the following:

  • Increased market presence in an expanded, US$1.3 billion addressable market
  • A strongly positioned business with a highly differentiated optical transceiver IC portfolio, spanning the entire optical speed range from 100Mb/s to 100Gb/s
  • Strengthened optical transceiver IC market position for telecom, Ethernet, PON and consumer optics applications
  • State of the art CMOS technology to deliver groundbreaking low cost optical IC products
  • Addresses customers’ need to consolidate the supply chain and provide a convenient one-stop-shop for optical transceiver ICs at all data rates
  • Increased revenues, with Nanotech’s revenues for the year ended December 31, 2010 being approximately US$7.4 million and current revenues being approximately US$1.0 million per month

“We are excited to join Gennum and create one of the industry’s most compelling optical IC transceiver portfolios,” said Gary Steele, Founder, CEO and Chairman of the Board of Nanotech. “By integrating our recognized expertise in low cost, high performance CMOS based optical products and technologies and talented employees with Gennum’s high speed optical products and global organization, customers will gain access to a uniquely comprehensive portfolio and product roadmap.”

This is Steele’s third exit, following on from Microcosm Communications, sold to Conexant, and a founding investment in Phyworks, sold to Maxim.

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