Broadcom Eyes Acquisitions - Analyst Blog


Leading chipmaker Broadcom Corporation ( BRCM ) continues to make efforts to broaden its product portfolio. According to Forbes, Broadcom intends to buy Israeli-based BroadLight Ltd., for roughly $200.

BroadLight provides highly integrated networking and embedded processors which enable fiber grade quality of service delivery for central office and customer premise equipment.

Established in 2000, privately-held BroadLight has offices in Santa Clara, CA, China, Taiwan and Korea. The company was funded by venture capitalists - Azure Capital Partners, Benchmark Capital, Delta Ventures, Israel Seed Partners, Motorola Ventures, the venture fund of Motorola, Star Ventures and Cipio Partners. The company is headquartered in Herzliya, Israel.

This fiber grade architecture from BroadLight can power equipment vendors by enabling broadband telecommunication operators to access fixed and mobile networks and connected digital homes worldwide.

BroadLight's fiber access product portfolio comprises of two distinct product lines: Helios embedded multi-core processors and Alto fiber access GPON processors. In addition, BroadLight's processors are designed with unique fiber grade architecture, which allows concurrent performance of triple and quad play services to ensure excellent quality.

In September, Broadcom Corporation announced that it will acquire NetLogic Microsystems for $3.7 billion or $50 per share. Headquartered in Santa Clara, California, NetLogic develops high-performance intelligent semiconductor solutions that power next-generation Internet networks.

The transaction is expected to close in the first half of 2012.  Broadcom expects the acquisition to be accretive to the bottom-line by approximately $0.10 (excluding onetime items) in 2012.  

Management expects the acquisition to broaden Broadcom's infrastructure portfolio with a number of critical new product lines and technologies, including knowledge-based processors, multi-core embedded processors, and digital front-end processors. These acquisitions will hopefully provide Broadcom the technological edge, which has become so very critical in its markets.

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

BROADCOM CORP-A ( BRCM ): Free Stock Analysis Report
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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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