Broadcom, a provider of semiconductors for wired and wireless communications, announced that it has signed a definitive agreement to acquire Provigent, a privately-held provider of mixed signal semiconductors for microwave backhaul systems, with offices in Israel and Santa Clara, Calif.
In connection with the acquisition, Broadcom expects to pay approximately $313 million, net of cash assumed, to acquire all of the outstanding shares of capital stock and other equity rights of Provigent. The purchase price will be paid in cash, except that a portion attributable to certain unvested employee stock options will be paid in Broadcom restricted stock units.
A portion of the cash consideration will be placed into escrow pursuant to the terms of the acquisition agreement. Broadcom expects the acquisition of Provigent to be neutral to earnings in 2011.
Broadcom provides one of the industry's broadest portfolios of Ethernet networking solutions for service provider infrastructure including the mobile backhaul. With the addition of Provigent's engineering expertise in microwave radio products, the company expands its portfolio to more thoroughly address the $5 billion microwave backhaul equipment business.
To manage the growth in wireless traffic and transition to 4G, carriers are faced with the challenge of backhauling data from the cell sites to the core network. Microwave backhaul is the most prevalent type of technology used in the multi-billion dollar global mobile backhaul business, representing more than 50 percent of all solutions.
The boards of directors of the two companies have approved the merger. The transaction is expected to close in Broadcom's second quarter 2011, and remains subject to the satisfaction of regulatory requirements and other customary closing conditions.