Little more than 18 months after a successful IPO, optical subsystem maker Optium Corp. [OPTM] has agreed to be swallowed by larger rival Finisar Corp. [FNSR] for about $212 million.

After pricing at $17.50 in October 2006, the company's shares climbed 21% on their first day of trading, granting handsome returns to their VC backers, including Battery Ventures, Kalkhoven, Pettit, Levin & Johnson Ventures LLC, Texas Pacific Group Ventures, and TL Ventures of Wayne, Pa.

But its shares have been on a gradual decline since peaking at $24.95 in December 2006, and the the company swung to a loss in its second fiscal quarter, which ended Feb. 2. of this year.

Based on Finisar shares' closing price Thursday, May 15, of $1.33, the buyer got itself quite a bargain. It's offer represents a 2.2% premium for Optium shareholders, valuing the target's shares at $8.32 each, less than half of Optium's IPO price.

Finisar has been relatively quiet on the acquisition front since 2005, when it acquired part of Infineon Technologies AG's optical component unit. While this latest deal was described by the companies as a merger, Finisar shareholders will own 65% of the combined company, which is expected to produce annual revenue of around $660 million. Finisar CEO Jerry Rawls will, however, hand over his role to Optium chief Eitan Gertel at the merged company. Rawls will remain chairman after the deal closes.

Shares of Finisar climbed 13%, to $1.50, in early afternoon trading on the news; Optium shares climbed 12%, to $9.08.

Finisar hired Oppenheimer & Co. and DLA Piper US LLP for advice on the deal. Optium turned to Morgan Stanley & Co. and Goodwin Procter LLP. -- Olaf de Senerpont Domis

See May 16 press release on the Optium acquisition from Yahoo! Finance
See October 2006 story on Optium's IPO from TheDeal.com
See January 2005 story on Infineon and Finisar from TheDeal.com