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Investing

Broadcom Buys Chip Maker (BRCM)

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By Paul Ausick Published

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Communications chip maker Broadcom Corp. (NASDAQ: BRCM) has agreed to acquire privately held BroadLight Inc. for $195 million in a transaction that is essentially all-cash except for certain unvested BroadLight options. There is an additional $10 million earn-out provided certain performance conditions are met.

BroadLight, which is incorporated in the US and operates in Israel, makes “highly integrated networking and fiber access PON (Passive Optical Network) processors.” Broadcom believes the acquisition puts the company in a better position to take advantage of the forecast for explosive growth in demand for high-bandwidth communications.

Broadcom expects the acquisition to be revenue-neutral in the 2012 fiscal year. Broadcom’s shares closed at $38.39 yesterday in a 52-week range of $27.59-$41.44.

Contact [email protected] for any questions or corrections.

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About the Author Paul Ausick →

Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.

He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.

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