Jerusalem Venture Partners (JVP) announced yesterday that it had signed an agreement to sell CyOptics Inc. to Avago Technologies Ltd. (Nasdaq: AVGO), a developer of of analog interface components for communications, industrial and consumer applications, for $400 million in cash. CyOptics was founded in 1999 by Dr. Uzi Koren and JVP and its founder MK Erel Margalit (Labor) as a spin-off from SCD, a subsidiary of Elbit Systems Ltd. (Nasdaq: ESLT; TASE: ESLT) and Rafael Advanced Defense Systems Ltd.
JVP was founded by MK Erel Margalit (Labor). Its track record includes the sale of Chromatis Networks for $4.82 billion in 2000, the highest amount ever paid for an Israeli company.
CyOptics is developing next-generation optical components for high-speed transmission of video content. Customers include governments and some of the world's biggest companies. The company is growing rapidly, tripling its sales in the past three years to $210 million in 2012.
JVP, run by general partners Gadi Tirosh and Kobi Rozengarten, has been the largest investor in CyOptics since it was founded, and currently owns more than 50%. In January 2011, JVP, which specializes in building big companies by acquiring large stakes in them, led a $50 million internal round in CyOptics, buying most of the stakes of other investors, and boosting its own stake from 11% to over 50%. In March 2012, JVP brought in a Boston private equity fund as shareholder in the company.
JVP's investment strategy in CyOptics over the past decade included major steps, such as expansion of the company through mergers and acquisitions; the establishment of the first designated fund of its kind in Israel to invest in late-stage companies, including in CyOptics; and the decision to bring in the Boston private equity fund as a strategic partner.
"I would also like to take this opportunity to thank our long standing investors, JVP and especially their founder, Dr. Erel Margalit, for their support and guidance over the past decade in building CyOptics into the significant industry participant it is today," said CyOptics president and CEO Ed Coringrato.