Fujikura to acquire WSS vendor Nistica

Fujikura Ltd. has signed a definitive agreement to acquire privately held Nistica. Based in Bridgewater, NJ, Nistica develops wavelength-selective switches (WSS) focused on metro applications.

The Japanese company already owned a stake in Nistica, along with Battelle Ventures, Novitas Capital, Technology Venture Partners, MMV Financial, Mizuho Capital, and NTT Electronics, as well as Bill Cadogan and Kal Shastri (who recently sold his stake in another company, Lightwire, to Cisco). In total, Nistica had raised $31 million. How much Fujikura will pay to buy out its co-investors was not disclosed.

“Fujikura has been a strategic partner of Nistica and an investor in Nistica since 2007," said Noboru Sugiyama, senior vice president and member of the board of Fujikura. “The steady growth in high-volume delivery of wavelength selective switches and the transparent working relationship between our teams convinced us that acquiring Nistica’s talent was the logical next step in our partnership. We are delighted to support this team in its tradition of launching innovative products into the marketplace.”

Finisar also participated in Nistica’s Series B funding round in 2008 as part of an agreement to co-market Nistica’s WSS products (see "Finisar partners with Nistica on ROADMs"). At the time, Finisar Executive Chairman Jerry Rawls admitted to Lightwave that he had attempted to buy Nistica, but had been turned down.

Nistica CEO Ashish Vengsarkar this morning declined to comment on the relationship with Finisar, but said that his company had become more open to acquisition recently because it had reached a stage in its maturation where scale had become more important. The company now has approximately 15 customers and is approaching cash-flow break even.

Vengsarkar noted that, as one of the few standalone WSS developers in the market, several companies had approached Nistica about an acquisition over the past year. Fujikura made the most sense because it was already intimately familiar with the company, he said. The fact that Nistica will continue relatively independent operations as a subsidiary of Fujikura rather than disappear into another company also had appeal, Vengsarkar added.

Fujikura will add Nistica’s WSS products to its existing line of optical components and subsystems. It also provides optical fiber cabling, test and measurement, and related products through its AFL subsidiary.

The acquisition is subject to various standard closing conditions and is expected to complete in the first quarter of Fujikura's fiscal year 2012. NTT Electronics Ltd. (NEL) will continue to hold its shares in the company going forward.