Codeon, Quantum Photonics join

Merged company, Covega, to be based in Jessup

March 06, 2003|By Stacey Hirsh | Stacey Hirsh,SUN STAFF

Codeon Corp. and Quantum Photonics, two Howard County telecommunications companies, said yesterday that they have merged and obtained $17 million in funding.

The new company, Covega Corp., will be headquartered in Jessup. Robert Harvey, who was the chief executive officer of Columbia-based Codeon, is the new company's chief executive. Dan Petrescu, who was Jessup-based Quantum Photonics' chief executive, is the new company's president.

Codeon and Quantum Photonics make components for fiber-optic networks. Voice and data are carried across fiber-optic networks by pulses of light. Codeon, which was founded in 1999, makes the pieces that turn the light on and off so that it makes a signal. Quantum Photonics, founded in 2000, makes the materials that produce and amplify the light signals.

"We'll be able to work on making not only those same separate components we made before the merger but we're already working on making subsystems that put those components together in one box," Harvey said.

The new company has about 30 customers and 120 employees. Harvey said a few jobs will be cut because of overlap.

Harvey said the $17 million in venture funding would be used to consolidate Codeon's two Columbia offices with Quantum Photonics' facility in Jessup. Most of the money, he said, will be used for product development, operations and working capital.

The lead investors in the financing are OCG Ventures, New Enterprise Associates, Boulder Ventures, Core Capital Partners, EDB Ventures, Intersouth Partners, Kinetic Ventures and Siemens Venture Capital.

Stephanie Rogers, a partner in OCG Ventures who was on the board at Quantum Photonics, said OCG chose to invest in the new company because of the chance to work with interesting technologies and solid technical and management teams.

"You've got two top technical teams," she said. "You add to that very strong commercialization expertise on both sides and the ability, not only to fabricate these products, but then package them and add whatever bells and whistles the customers want, with a strong management team and put that under one roof."

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