Intel said it has completed the sale of product lines and associated assets of its optical-networking components business to Cortina Systems

Under the terms, Cortina Systems has acquired the assets of Intel's optical network components business for $115 million, which consists of a minority investment position and an undisclosed amount of cash.

Cortina also announced the completion of a new $132 million funding round led by new investor Institutional Venture Partners (IVP) as well as existing investors Canaan Partners and Morgenthaler Ventures. Additional investors providing funding include new investors Alloy Ventures, Bridgescale Partners, Doll Capital Management, and Sofinnova Ventures, and along with all of Cortina's existing venture investors.

Intel?s optical components business can be traced back to several ill-fated acquisitions, including Level One Communications and Giga A/S. In 1999, Intel acquired Level One Communications, a LAN/WAN chip specialist, for $2.2 billion.

Earlier this year, struggling Intel halted future development of optical physical-layer products developed by Giga A/S, a Copenhagen-based company Intel acquired in 2000 for $1.25 billion.

The divesture of the optical-networking components business is the latest in a string of moves by Intel to restructure the company around core businesses.

Meanwhile, Cortina, a Sunnyvale, Calif. fabless chip company, said the infusion of enterprise and infrastructure communications products positions it to become a leading communications semiconductor company.

The acquisition includes a selection of Intel's Ethernet media access controllers (MACs) and physical layer devices (PHYs) portfolio, and its entire portfolio transport and service framers, optical transport forward error correction framers and T1/E1 line interface products.

"The optical-networking components segment remains a strong market opportunity, and we believe this business and its assets are an optimal fit for Cortina as it grows the business while maintaining customer commitments," said Bill Chatwell, general manager of Intel's optical-networking components division, in a statement.

According to Amir Nayyerhabibi, Cortina CEO, the acquisition "greatly broadens" Cortina to give the company a "comprehensive portfolio of products for network infrastructure." He added, "The substantial customer overlap was a key driver for this acquisition, and customers support our decision to bring these products together under the Cortina brand."

Cortina said it plans to continue to work closely with Intel as an active member of the Intel Communications Alliance.