Broadcom Completes BroadLight Acquisition - Analyst Blog


Broadcom Corporation ( BRCM ) recently completed its acquisition of BroadLight, Inc. The acquisition was announced in March 2012.

Based in Delaware, BroadLight had a subsidiary in Israel as well. BroadLight provides highly integrated networking and fiber access PON (Passive Optical Network) processors.

Broadcom paid $195 million in cash for the acquisition. 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 ubiquitous demand for increased bandwidth for IPTV services, HDTV broadcasting and high speed Internet access continues to drive momentum for deploying fiber networks.

Management stated that the addition of Broadcom will broaden the company's broadband access product line by powering Broadcom to now offer a complete, end-to-end GPON solution for customers. The solution spans from the optical line terminal (OLT) at the central office to the optical network unit (ONU) at home.

This product line from BroadLight when combined with Broadcom's networking and management software, home networking portfolio and VoIP expertise will offer the customers an extensive product portfolio of wireline access products. The acquisition will help Broadcom support customer requirements for rolling out next-generation fiber networks on a worldwide basis.

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.

We maintain our Neutral recommendation on Broadcom. Our recommendation is supported by a Zacks #3 Rank, which translates into a short-term rating of Hold.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: BRCM

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