In order to expand its broadband access portfolio,
) recently announced that it will acquire privately-held BroadLight
for approximately $195 million.
Based in Delaware, BroadLight had a subsidiary in Israel as
well. Broadlight provides highly integrated networking and fiber
access PON (Passive Optical Network) processors.
The acquisition will help Broadcom support customer requirements
for rolling out next-generation fiber networks on a worldwide
The ubiquitous demand for increased bandwidth for IPTV services,
HDTV broadcasting and high speed Internet access continues to drive
momentum for deploying fiber networks.
Broadcom will pay the purchase price in cash except for that
portion attributable to certain unvested employee stock options
that will be paid in Broadcom restricted stock units.
The company will also reserve an additional $10 million in cash,
which will be reserved reserved for future payment to holders of
BroadLight capital stock and other rights upon satisfaction of
certain performance goals.
Broadcom expects that the acquisition will be roughly neutral to
the bottom-line in 2012, excluding any purchase accounting-related
adjustments and fair-value measurements.
The company expects to close the acquisition in the second
quarter of 2012.
Industry stalwart like Broadcom continues to be active on the
acquisition front to expand its product portfolio. The company has
an enormous cash balance as well which it uses to make strategic
acquisitions. Last month, Broadcom completed the acquisition of
NetLogic Microsystems, Inc. for $3.7 billion, announced in
September 2011. .
NetLogic is a global fabless semi-conductor company, selling
networking processors and integrated circuits. Its solutions are
primarily used as high-performance systems in switches, routers,
wireless base stations, security appliances and other various
connected media components produced by original equipment
We maintain our Neutral recommendation on the stock. Our
recommendation is supported by Zacks #3 Rank, which translates into
a short-term rating of Hold.
BROADCOM CORP-A (
): Free Stock Analysis Report
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