Cisco to buy optical network specialist CoreOptics

Deal will support Cisco's plans for 100Gbit/s IP networks

Cisco sees big market for 100Gbit/s network speeds

Network giant Cisco has agreed a deal to acquire San José-based optical network digital signal processing (DSP) firm CoreOptics.

Cisco service provider technology general manager Surya Panditi said that acquiring CoreOptics would reinforce the firm's commitment to its core networking business and deliver IP next-generation networks at 100Gbit/s and beyond.

"The acquisition will help our service provider customers manage tight capital and operating budgets while dealing with the tremendous growth in network traffic," said Panditi.

Market research firm Infonetics predicts 10Gbit/s, 40Gbit/s and 100Gbit/s network port shipments will increase 10-fold between 2009 and 2014.

Acquiring CoreOptics will expand Cisco's optical presence in Europe, building on its existing operations in Monza, Italy.

CoreOptics has expertise in digital Asic design and advanced modulation formats, on top of its optical systems, applications and network architecture knowledge.

After the acquisition completes, CoreOptics staff will become part of the Cisco Service Provider Technology Group and work with Cisco's existing optical engineering teams in India, Italy and Texas.

Under the terms of the agreement, Cisco will pay about $99m (£69m) in cash and retention-based incentives in exchange for CoreOptics shares.

The acquisition is subject to customary closing conditions and expected to complete during the second half of 2010.