Chinese co to buy Israel's ColorChip for $300m

ColorChip founders Photo: PR

An unnamed Chinese company has agreed terms for the acquisition of the high bandwidth electro-optic components developer.

Israeli company ColorChip is to be acquired by a Chinese company for $300 million. Sources inform "Globes" that the sale talks have been completed and the final terms of the deal completed, although not yet signed. Full details about the acquisition including the name of the Chinese buyer have not been disclosed.

ColorChip was founded in 2000 by Eli Arad, who serves as VP Research and Development, Shimon Eckhaus, and Prof. Shlomo Ruschin. The company's CEO is Yigal Ezra.

Yokne'am-based ColorChip has developed high bandwidth electro-optic components for data transmission in the datacenters of large enterprises. Among its customers is Facebook, which uses the Israeli components in the datacenters it operates in various countries. The fact that the buyer is Chinese is no surprise since China is one of ColorChip's main markets alongside North America and Europe.

ColorChip's three main investors are Eli Barkat's BRM, Moshe Lichtman and Haim Shani's IGP (Israel Growth Partners) and Gemini funds. Together they hold 60% of the company with the remaining 40% belonging to other funds and the company's founders.

Over the years, the company has raised $97 million. In April 2017, it raised $37 million in a round led by the CIRTech and Scale-Up funds. Other investors include Vintage Fund and HGL Capital and Vertex and Bessemer were investors at the early stage, although they sold their stakes to other funds.

ColorChip has a bleak history of layoffs and downsizing, which brought it to the brink of liquidation in 2009, but restructuring and repositioning led to penetration of new markets and to further fund-raising from venture capital funds.

Published by Globes [online], Israel business news - www.globes-online.com - on August 27, 2018

© Copyright of Globes Publisher Itonut (1983) Ltd. 2018

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ColorChip founders Photo: PR
ColorChip founders Photo: PR
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