Ikanos Communications, a maker of broadband chips, says it brought in $42 million from Tallwood Capital, a firm that specializes in early-stage chip enterprises. The money will go toward a $54 million product acquisition from competitor Conexant Systems, reports VentureWire.
Because Ikanos is a public company, this round of funding is categorized as a private investment in public equity (PIPE) -- something that has become fairly popular as valuations decline. Close to $1.5 billion in investments went into PIPE deals in the first quarter alone.
The deal between Ikanos and Tallwood will give the latter a 45 percent stake in the Fremont, Calif. company. It's expected to be finalized by the end of the third quarter.