- World Cup 2014
Posted : 2011/09/13 12:33 am
US chip maker Broadcom said Monday it would acquire California rival NetLogic Microsystems in a $3.7 billion all-cash deal as it seeks to extend its footprint in network communications processors.
Broadcom will pay $50 per share for NetLogic, a 57 percent premium over the firm's closing price Friday of $31.91, under the terms of the merger agreement, Broadcom said in a statement.
The deal has been approved by the two companies' boards of directors, and is subject to shareholder and regulatory approval, Broadcom said.
The merger is expected to close in the first half of 2012.
'This transaction delivers on all fronts for Broadcom's shareholders -- strategic fit, leading-edge technology and significant financial upside,' Scott McGregor, Broadcom's president and chief executive, said in the statement.
'With NetLogic Microsystems, Broadcom is acquiring a leading multi-core embedded processor solution, market-leading knowledge-based processors, and unique digital front-end technology for wireless base stations that are key enablers for the next generation infrastructure build-out,' he added.
The Irvine, California-based Broadcom also confirmed its third-quarter outlook of $1.9-2.0 billion in revenue, and said it expected to have a cash pile of $4.2 billion by end-quarter, compared to $3.8 billion at the end of the second quarter.
NetLogic, headquartered in Santa Clara, reported a second-quarter loss of $35.2 million in July, despite revenue gains of more than nine percent, to $103.7 million.
Shares in Broadcom fell 1.1 percent to close at $33.06; NetLogic shares soared 50.8 percent to $48.12.
2 Years ago