Cipio in $230m direct secondary exit

Cipio Partners is to sell Israeli chip-maker BroadLight, marking the firm's latest in a series of exits in the semiconductor industry.

Cipio Partners, a Munich-headquartered direct secondaries firm, is poised to make its fifth exit in the semiconductor industry over the past two years. The firm will sell Israeli chip maker BroadLight to US communications giant Broadcom, the firm said in a statement.

BroadLight is a manufacturer of PON chips, which are used in high speed broadband and telecoms networks.Cipio acquired the business when it paid an undisclosed price for a portfolio of more than 20 direct investments in software, semiconductor and communications from Siemens in September 2007.

Broadcom will pay $195 million to acquire all outstanding shares and equity rights in BroadLight as well as around $40 million in cash, according to a source close to the deal. It will pay an additional $10 million to stockholders dependent on performance, said a Broadcom statement.

In the past two years, Cipio has exited a number of semiconductor-related businesses:  Dune Networks, another Israeli investment sold to Broadcom; UK business PicoChip, which was sold to US company Mindspeed Technologies; Continuous Corp, a US investment exited to Nasdaq-listed Radisys; and French company DiBcom, which it sold to Euronext-listed Parrot.

“The semiconductor space has been a challenging market for most investors due to the very high capital investment required. For late-stage growth investors like Cipio Partners, the scalability of the business model, once companies have reached critical mass, has made it a good industry to do business in,” Cipio managing partner Roland Dennert said in a statement.

Cipio’s latest acquisition was MB Venture Capital Fund I, a Netherlands-based fund with interests in several European and Israeli technology and medical device companies. The firm currently invests from Cipio Partners Fund VI, a €137 million fund closed in 2009, and has approximately €300 million in assets under management.