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Cypress acquires Lara Networks for $225 million

Lara Networks Inc, a communications networking company founded by two Indian Americans, has been acquired by Cypress Semiconductors Corporation for a largely all-cash deal estimated at $225 million.

The San Jose, California-based Lara, is considered a leader in high-performance, silicon-based packet-processing solutions for wide area network infrastructure equipment.

The company was founded by Kamal Gunsagar, chief executive officer, and Jayan Ramankutty, president and chief operating officer.

Reacting to the deal, industry analysts said that despite the economic slowdown in the $5-billion networking market, some firms are still willing to take risks.

"Lara's network search engines and co-processors are synergistic with Cypress's current offerings for the networking market and will expand Cypress's portfolio of solutions across the line-card," Gunsagar, an alumni of the Indian Institute of Technology in Bombay, said in a statement.

"We will be able to leverage the strength of Cypress's global sales and marketing organisations to attract new customers and secure new design opportunities," he added.

"Lara's products will enable us to address the core functionality of network processors, the 'brains' of a networking subsystem," T J Rodgers, president and CEO of Cypress, said.

Rumors of Lara's acquisition by Cypress had been doing the rounds in the information technology industry ever since Cypress began scouting for a line-card solution provider for its networking division.

Lara, meanwhile, began to widen its operations as a broad-based supplier of silicon-based networking solutions with the acquisition of WarpCom Technologies, that is in the business of Ethernet switching.

The company also closed its third round of funding worth $40 million in October last year, taking the investments pumped into the venture to more than $57.5 million.

While industry watchers are critical about the timing of the deal between Cypress and Lara, Gunsagar and Ramankutty, who has a bachelor's degree in electrical engineering from BITS Pilani, feel otherwise.

The two co-founders have said that Lara Networks will continue to operate as an independent company for a few months, before becoming a separate unit of Cypress Semiconductors' communication's division.

Indo-Asian News Service

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