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April 4, 2006
PMC and Passave: Telecom ... Game On!
Game is "on" again apparently in the networking business, with PMC-Sierra swapping $300mm in stock for chip-maker Passave. The five-year-old company is a maker of passive optical networking (PON) gear to drive fiber-to-the-home (FTTH). (Ah, the joys of acronym-happy telecom.)The valuation is fairly impressive. Last year's Passave sales (which doubled from the prior year) were $43.2mm, putting the deal at just shy of 7 times trailing sales.
As a venture investing aside, none of the usual VC suspects were seemingly backers of Passave. That won't, however, stop recovering telecom investors all over venture land from fantasizing about similar multiples for their various and sundry telecom portfolio companies.
[Update] Andrew over at Nyquist Capital has been following Passave very closely. He has a thoughtful and entirely worth-reading perspective on the PMC acquisition.
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